Exhibit 99.1
STOCK PURCHASE AGREEMENT
between
UNITED STATIONERS SUPPLY CO.
an Illinois corporation
("Purchaser")
and
▇▇▇▇▇▇▇ BROS., INC.
a Louisiana corporation
("Company")
and
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
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and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
being all of the shareholders of the Company
(the "Shareholders")
This STOCK PURCHASE AGREEMENT ("Agreement") is made as of
October 1, 1996, by United Stationers Supply Co., an Illinois
corporation ("Purchaser"), ▇▇▇▇▇▇▇ Bros., Inc., a Louisiana
corporation (the "Company"), and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, being all of
the shareholders of the Company (the "Shareholders").
RECITALS
The Shareholders own Two Thousand Eighty-eight (2,088)
shares of common stock that constitute all of the issued and
outstanding shares (the "Shares") of capital stock of the
Company;
The Shareholders desire to sell to Purchaser, and
Purchaser desires to purchase from Shareholders, all of the
issued and outstanding shares of common stock of the Company,
in accordance with the terms and conditions hereinafter set
forth;
AGREEMENT
In consideration of the mutual representations,
warranties, covenants, and agreements contained herein, the
parties, intending to be legally bound, agree as follows:
1. Definitions
"Adjustment Amount" - as defined in Section 2.5
"Applicable Contract" - any Contract (a) under which the
Company has or may acquire any rights, (b) under which
the Company has or may become subject to any obligation
or liability, or (c) by which the Company or any of the
assets owned or used by it is or may become bound.
"Best Efforts" - the efforts that a prudent Person desirous of
achieving a result would use in similar circumstances to
ensure that such result is achieved as expeditiously as
possible.
"Breach" - a "Breach" of a representation, warranty, covenant,
obligation, or other provision of this Agreement or any
instrument delivered pursuant to this Agreement will be
deemed to have occurred if there is or has been (a) any
inaccuracy in or breach of, or any failure to perform or
comply with, such representation, warranty, covenant,
obligation, or other provision, or (b) any claim (by any
Person) or other occurrence or circumstance that is or
was inconsistent with such representation, warranty,
covenant, obligation, or other provision, and the term
"Breach" means any such inaccuracy, breach, failure,
claim, occurrence, or circumstance.
"Claims Period" - The one-year period beginning on the Closing
Date and ending on the first anniversary thereof, within
which any assertable claim to be made by either party
with regard to the breach of any representation,
warranty, covenant, obligation, or indemnity set forth
herein must be so asserted.
"Closing" - as defined in Section 2.3.
"Closing Date" - the date and time as of which the Closing
actually takes place.
"Closing Date Balance Sheet" - the Balance Sheet to be
prepared by the Company as of the Closing Date and
delivered to Purchaser at Closing, prepared in accordance
with generally accepted accounting principles applied on
a basis consistent in form with the balance sheet of the
Company as of December 31, 1995.
"Consent" - any approval, consent, ratification, waiver, or
other authorization (including any Governmental
Authorization).
"Contemplated Transactions" - all of the transactions
contemplated by this Agreement, including:
(a) the sale of Shares by the Shareholders to Purchaser;
(b) the execution, delivery and performance of the
Employment Agreements, the Noncompetition
Agreements, the Shareholders' Releases, and the
Escrow Agreement;
(c) the performance by Purchaser, the Company and the
Shareholders of their respective covenants and
obligations under this Agreement; and
(d) Purchaser's acquisition and ownership of the Shares
and exercise of control over the Company.
"Contract" - any agreement, contract, obligation, promise, or
undertaking (whether written or oral and whether express
or implied) that is legally binding.
"Damages" - as defined in Section 10.2.
"Disclosure Letter" - the disclosure letter delivered by the
Company and the Shareholders to Purchaser concurrently
with the execution and delivery of this Agreement, as
Exhibit 1 to this Agreement.
"Employment Agreements" - as defined in Section 2.4(a)(iii).
"Encumbrance" - any charge, claim, community property
interest, condition, equitable interest, lien, option,
pledge, security interest, easement, right of way, right
of first refusal, or restriction of any kind, including
any restriction on use, voting, transfer, receipt of
income, or exercise of any other attribute of ownership.
"Environment" - soil, land surface or subsurface strata,
surface waters (including navigable waters, ocean waters,
streams, ponds, drainage basins, and wetlands)
groundwaters, drinking water supply, stream sediments,
ambient air (including indoor air), plant and animal
life, and any other environmental medium or natural
resource.
"Environment, Health and Safety Liabilities" - any cost,
damages, expense, liability, obligation, or other
responsibility arising from or under Environmental Law or
Occupational Safety and Health Law and consisting of or
relating to:
(a) any environmental, health, or safety matters or
conditions (including on-site or off-site
contamination, occupational safety and health, and
regulation of chemical substances or products);
(b) fines, penalties, judgments, awards, settlements,
legal or administrative proceedings, damages,
losses, claims, demands and response, investigative,
remedial, or inspection costs and expenses arising
under Environmental Law or Occupational Safety and
Health Law;
(c) financial responsibility under Environmental Law or
Occupational Safety and Health Law for cleanup costs
or corrective action, including any investigation,
cleanup, removal, containment, or other remediation
or response actions ("Cleanup") required by
applicable Environmental Law or Occupational Safety
and Health Law (whether or not such Cleanup has been
required or requested by any Governmental Body or
any other Person) and for any natural resource
damages; or
(d) any other compliance, corrective, investigative, or
remedial measures required under Environmental Law
or Occupational Safety and Health Law.
The terms "removal", "remedial", and "response
action," include the types of activities covered by the
United States Comprehensive Environmental Response,
Compensation, and Liability Act, 42 U.S.C. Sec. 9601 et
seq., as amended ("CERCLA").
"Environmental Law" - any Legal Requirement that requires or
relates to:
(a) advising appropriate authorities, employees, and the
public of intended or actual releases of pollutants
or hazardous substances or materials, violations of
discharge limits, or other prohibitions and of the
commencements of activities, such as resource
extraction or construction, that could have
significant impact on the Environment;
(b) preventing or reducing to acceptable levels the
release of pollutants or hazardous substances or
materials into the Environment;
(c) reducing the quantities, preventing the release, or
minimizing the hazardous characteristics of wastes
that are generated;
(d) assuring that products are designed, formulated,
packaged, and used so that they do not present
unreasonable risks to human health or the
Environment when used or disposed of;
(e) protecting resources, species, or ecological
amenities;
(f) reducing to acceptable levels the risks inherent in
the transportation of hazardous substances,
pollutants, oil, or other potentially harmful
substances;
(g) cleaning up pollutants that have been released,
preventing the threat of release, or paying the
costs of such clean up or prevention; or
(h) making responsible parties pay private parties,
or groups of them, for damages done to their health
or the Environment, or permitting self-appointed
representatives of the public interest to recover
for injuries done to public assets.
"ERISA" - the Employee Retirement Income Security Act of 1974,
as amended, and regulations and rules issued pursuant to
that Act.
"Escrow Agreement" - as defined in Section 3.13.
"Facilities" - any real property, leaseholds, or other
interests currently or formerly owned or operated by the
Company and any buildings, structures or equipment
(including motor vehicles and rolling stock) currently or
formerly owned or operated by the Company.
"Financial Statements" - Company's financial statements,
prepared in accordance with generally accepted accounting
principles, consistently applied, that present a
complete, true and accurate statement of the Company's
financial condition for the periods covered therein.
"GAAP" - generally accepted United States accounting
principles, applied on a basis consistent with the basis
on which the Balance Sheet and other financial statements
referred to in Section 3.4(b) were prepared.
"Governmental Authorization" - any approval, consent, license,
permit, waiver, or other authorization issued, granted,
given, or otherwise made available by or under the
authority of any Governmental Body or pursuant to any
legal Requirement.
"Governmental Body" - any:
(a) nation, state, county, city, village, town, district
or other jurisdiction of any nature;
(b) federal, state, local, municipal, foreign or other
government;
(c) governmental or quasi-governmental authority of any
nature (including any governmental agency, branch,
department, official or entity and any court or
other tribunal);
(d) multi-national organization or body; or
(e) body exercising, or entitled to exercise, any
administrative, executive, judicial, legislative,
police, regulatory, or taxing authority or power of
any nature.
"Hazardous Activity" - the distribution, generation, handling,
importing, management, manufacturing, processing,
production, refinement, Release, storage, transfer
transportation, treatment, or use (including any
withdrawal or other use of groundwater) of Hazardous
Materials in, on, under, about, or from the Facilities or
any part thereof into the Environment, and any other act,
business, operation, or thing that increases the danger,
or risk of danger, or poses an unreasonable risk of harm
to persons or property on or off the Facilities, or that
may affect the value of the Facilities or the Company.
"Hazardous Materials" - any waste or other substance that is
listed, defined, designated, or classified as, or
otherwise determined to be, hazardous, radioactive or
toxic or a pollutant or a contaminant under or pursuant
to any Environmental Law, including any admixture or
solution thereof, and specifically including petroleum
and all derivatives thereof or synthetic substitutes
therefor and asbestos or asbestos-containing materials.
"HSR Act" - the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act
of 1976 or any successor law, and regulations and rules
issued pursuant to that Act or any successor law.
"Indemnified Persons" - as defined in Section 10.2.
"Intellectual Property Assets" - as defined in Section 3.22.
"Interim Balance Sheet" - as defined in Section 3.4.
"IRC" - the Internal Revenue Code of 1986 or any successor
law, and regulations issued by the IRS pursuant to the
Internal Revenue Code or any successor law.
"IRS" - the United States Internal Revenue Service and, to the
extent relevant, the United States Department of the
Treasury.
"Knowledge" - an individual will be deemed to have "Knowledge"
of a particular fact or other matter if:
(a) such individual is actually aware of such fact or
other matter; or
(b) a prudent individual could be expected to discover
or otherwise become aware of such fact or other
matter in the course of conducting a reasonably
comprehensive investigation concerning the existence
of such fact or other matter.
A Person (other than an individual) will be
deemed to have "Knowledge" of a particular fact or other
matter if any individual who is serving, or who has at
any time served, as a director, officer, or branch
manager of the Company or as a director, officer,
partner, executor, or trustee of such other Person (or in
any similar capacity) has, or at any time had, Knowledge
of such fact or other matter.
"Legal Requirement" - any federal, state, local, municipal,
foreign, international, multinational, or other
administrative order, constitution, law, ordinance,
principal of common law, regulation, statute, or treaty.
"Noncompetition Agreements" - as defined in Section
2.4(a)(iv).
"Occupational Safety and Health Law" - any Legal Requirement
designed to provide safe and healthful working conditions
and to reduce occupational safety and health hazards, and
any program, whether governmental or private (including
those promulgated or sponsored by industry associations
and insurance companies), designed to provide safe and
healthful working conditions.
"Order" - any award, decision, judgment, order, ruling,
subpoena, or verdict entered, issued, made or rendered by
any court, administrative agency, or Governmental Body or
by any arbitrator.
"Ordinary Course of Business" - an action taken by a Person
will be deemed to have been taken in the "Ordinary Course
of Business" only if:
(a) such action is consistent with the best practices of
such Person and is taken in the ordinary course of
the normal day-to-day operations of such Person;
(b) such action is not required to be authorized by the
board of directors of such Person (or by any Person
or group of Persons exercising similar authority)
and is not required to be specifically authorized by
the parent company (if any) of such Person; and
(c) such action is similar in nature and magnitude to
actions customarily taken, without any authorization
by the board of directors (or by any Person or group
of Persons exercising similar authority), in the
ordinary course of the normal day-to-day operations
of other Persons that are in the same line of
business as such Person.
"Organizational Documents" - (a) the articles or certificate
of incorporation and the bylaws of a corporation; (b) the
partnership agreement and any statement of partnership of
a general partnership; (c) the limited partnership
agreement and the certificate of limited partnership of a
limited partnership; (d) any charter or similar document
adopted or filed in connection with the creation,
formation, or organization of a Person; and (e) any
amendment to any of the foregoing.
"Person" - any individual, corporation (including any not-for-
profit corporation), general or limited partnership,
limited liability company, joint venture, estate, trust,
association, organization, labor union, or other entity
or Governmental Body.
"Plan" - as defined in Section 3.13.
"Proceeding" - any action, arbitration, audit, hearing,
investigation, litigation, or suit (whether civil,
criminal, administrative, investigative, or informal)
commenced, brought, conducted or heard by or before, or
otherwise involving, any Governmental Body or arbitrator.
"Real Estate" - all real property, and all leasehold interests
in estates and real property, of every kind and
description, and all buildings, structures, and
improvements of every nature located thereon, owned or
held by the Company and used or usable in the conduct of
the Company's business, together with any additions or
improvements made thereto.
"Related Person" - with respect to a particular individual:
(a) each other member of such individual's Family;
(b) any Person that is directly or indirectly controlled
by such individual or one or more members of such
individual's Family;
(c) each Person that serves as a director, officer,
partner, executor, or trustee of such specified
Person (or in a similar capacity);
(d) any Person in which such specified Person holds a
Material Interest;
(e) any Person with respect to which such specified
Person serves as a general partner or a trustee (or
in a similar capacity); and
(f) any Related Person of any individual described in
clause (b) or (c).
For purposes of this definition, (a) the "family" of
an individual includes (i) the individual, (ii) the
individual's spouse [ and former spouses], (iii) any
other natural person who is related to the
individual or the individual's spouse within the
second degree, and (iv) any other natural person who
resides with such individual, and (b) "Material
Interest" means direct or indirect beneficial
ownership (as defined in Rule 13d-3 under the
Securities Exchange Act of 1934) of voting
securities or other voting interests representing at
least 5% of the outstanding voting power of a Person
or equity securities or other equity interests
representing at least 5% of the outstanding equity
securities or equity interests in a Person.
"Release" - any spilling, leaking, emitting, discharging,
depositing, escaping, leaching, dumping, or other
releasing into the Environment, whether intentional or
unintentional.
"Representative" - with respect to a particular Person, any
director, officer, employee, agent, consultant, advisor,
or other representative of such Person, including legal
counsel, accountants, and financial advisors.
"Securities Act" - the Securities Act of 1933 or any successor
law, and regulations and rules issued pursuant to that
Act or any successor law.
"Shares" - as defined in the recitals of this Agreement.
"Shareholders' Releases" - as defined in Section 2.4.
"Tax" - any tax (including any income tax, capital gains tax,
value-added tax, sales tax, use tax, payroll tax,
property tax, gift tax, or estate tax), levy, assessment,
tariff, duty (including any customs duty), deficiency, or
other fee, and any related charge or amount (including
any fine, penalty, interest, or addition to tax),
imposed, assessed, or collected by or under the authority
of any Governmental Body or payable pursuant to any tax-
sharing agreement or any other Contract relating to the
sharing or payment of any such tax, levy, assessment,
tariff, duty, deficiency, or fee.
"Tax Return" - any return (including any information return),
report, statement, schedule, notice, form, or other
document or information filed with or submitted to, or
required to be filed with or submitted to, any
Governmental Body in connection with the determination,
assessment, collection, or payment of any Tax or in
connection with the administration, implementation, or
enforcement of or compliance with any Legal Requirement
relating to any Tax.
"Threat of Release" - a substantial likelihood of a Release
that may require action in order to prevent or mitigate
damage to the Environment that may result from such
Release.
"Threatened" - a claim, Proceeding, dispute, action, or other
matter will be deemed to have been "Threatened" if any
demand or statement has been made (orally or in writing)
or any notice has been given (orally or in writing), or
if any other event has occurred or any other
circumstances exist, that would lead a prudent Person to
conclude that such a claim, Proceeding, dispute, action,
or other matter is likely to be asserted, commenced,
taken, or otherwise pursued in the future.
2. SALE AND TRANSFER OF SHARES: CLOSING
2.1 Shares
Subject to the terms and conditions of this Agreement, at the
Closing, the Shareholders will sell and transfer the Shares to
Purchaser, and Purchaser will purchase the Shares from the
Shareholders, free and clear of any adverse claims or
Encumbrances.
2.2 Purchase Price
The purchase price (the "Purchase Price") for the Shares will
be Forty-four Million One Hundred Thousand Dollars ($
44,100,000.00) plus or minus the Adjustment Amount.
2.3 Closing
The purchase and sale (the "Closing") provided for in
this Agreement will take place at the offices of the Company,
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, at 10:00 a.m. (local
time) on the later of (i) October 31, 1996, (ii) the date
that is two business days following the termination of the
applicable waiting period under the HSR Act, (iii) the date
that is two business days following the complete fulfillment
or waiver of the conditions set forth in Sections 7 and 8, or
at such other time and place as the parties may agree.
Subject to the provisions of Section 9, failure to consummate
the purchase and sale provided for in this Agreement on the
date and time and at the place determined pursuant to this
Section 2.3 will not result in the termination of this
Agreement and will not relieve any party of any obligation
under this Agreement.
2.4 Closing Obligations
At the Closing:
(a) Shareholders will deliver to Purchaser:
(i) certificates representing the Shares, duly
endorsed (or accompanied by duly executed
stock powers), with signatures guaranteed by
a commercial bank or by a member firm of the
New York Stock Exchange, for transfer to
Purchaser;
(ii) releases in the form of Exhibit 2.4(a)(ii)
executed by Shareholders (collectively,
"Shareholders' Releases");
(iii) employment agreements in the form of
Exhibit 2.4(a)(iii), executed by certain
Shareholders (collectively, "Employment
Agreements");
(iv) noncompetition agreements in the form of
Exhibit 2.4(a)(iv), executed by those
Shareholders not executing Employment
Agreements (collectively, the "Noncompetition
Agreements"); and
(v) a certificate executed by the Company and
Shareholders representing and warranting to
Purchaser that each of the Company's and
Shareholders' representations and warranties in
this Agreement was accurate in all respects as
of the date of this Agreement and is accurate
in all respects as of the Closing Date as if
made on the Closing Date (giving full effect to
any supplements to the Disclosure Letter that
were delivered by the Company or Shareholders
to Purchaser prior to the Closing Date in
accordance with Section 5.5); and
(b) Purchaser will deliver to or on behalf of the
Shareholders:
(i) the sum of $ 4,500,000.00, plus an amount equal
to the estimated Adjustment Amount, to the
escrow agent referred to in Section 2.4(c) by
bank cashier's or certified check;
(ii) amounts equal to the Shareholders' legal and
accounting fees and expenses, and any
reimbursable expenses of Legacy Capital, as
determined at Closing;
(iii) the balance of the Purchase Price, less
the amounts referred to in (i) and (ii) above,
by bank cashier's or certified checks payable
in equal amounts to the order of, or by wire
transfer to accounts specified by, each of the
Shareholders;
(iv) a certificate executed by the Purchaser to
the effect that, except as otherwise stated in
such certificate, each of the Purchaser's
representations and warranties in this
Agreement was accurate in all respects as of
the date of this Agreement and is accurate in
all respects as of the Closing Date as if made
on the Closing Date; and
(v) the Employment Agreements, executed by the
Company.
(c) Purchaser and the Shareholders will enter into an
escrow agreement in the form of Exhibit 2.4(c) (the
"Escrow Agreement") with and escrow agent to be
agreed between the parties.
2.5 Adjustment Amount
The Adjustment Amount (which may be a positive or
negative number) will be equal to (a) the stockholder's equity
of the Company as of the Closing Date determined in accordance
with GAAP, but not to exceed $6,700,000.00, minus (b)
$5,700,000.00.
2.6 Adjustment Procedure
(a) The Company, at its expense, will prepare and will
cause LaPorte, Sehrt, ▇▇▇▇▇ & Hand, the Company's
certified public accountants, to audit consolidated
financial statements ("Closing Financial
Statements") of the Company as of the Closing Date
and for the period from December 31, 1995 through
the Closing Date, including a computation of
Shareholders' equity as of the Closing Date. The
Shareholders will deliver the Closing Financial
Statements to Purchaser within sixty days after the
Closing Date. If within thirty days following
delivery of the Closing Financial Statements,
Purchaser has not given the Shareholders notice of
its objection to the Closing Financial Statements
(such notice must contain a statement of the basis
of Purchaser's objection), then the Shareholders'
equity reflected in the Closing Financial Statements
will be used in computing the Adjustment Amount. If
Purchaser gives such notice of objection, then the
issues in dispute will be submitted to a "big six"
accounting firm with an office in New Orleans
mutually acceptable to the Shareholders and
Purchaser (the "Accountants"), for resolution. If
issues in dispute are submitted to the Accountants
for resolution, (i) each party will furnish to the
Accountants such workpapers and other documents and
information relating to the disputed issues as the
Accountants may request and are available to that
party (or its independent public accountants), and
will be afforded the opportunity to present to the
Accountants any material relating to the
determination and to discuss the determination with
the Accountants; (ii) the determination by the
Accountants, as set forth in a notice delivered to
both parties by the Accountants, will be binding and
conclusive on the parties; and (iii) Purchaser and
Shareholders will each bear 50% of the fees of the
Accountants for such determination.
(b) On the tenth business day following the final
determination of the Adjustment Amount, if the
Adjustment Amount is equal to or greater than the
estimated Adjustment Amount deposited pursuant to
Section 2.4(b)(i), the escrow agent, upon written
direction from Purchaser and a representative of
Shareholders, will distribute the amount of the
estimated Adjustment Amount to Shareholders and
Purchaser will pay the difference, if any, to the
Shareholders. If the Purchase Price is less than
the estimated Adjustment Amount, the escrow agent,
upon written direction from Purchaser and a
representative of Shareholders, will pay the
difference between the estimated Adjustment Amount
and the Adjustment Amount as finally determined to
Purchaser. In addition, at the time of distribution
of said difference to Shareholders or Purchaser, the
escrow amount shall be reduced to Three Million
Dollars ($3,000,000) for the remainder of the escrow
period. All payments will be made together with
interest at the rate earned by the escrow,
compounded daily beginning on the Closing Date and
ending on the date of payment. Payments must be
made in immediately available funds. Payments to the
Shareholders must be made in the manner and will be
allocated equally between the Shareholders.
Payments to Purchaser must be made by wire transfer
to such bank account as Purchaser will specify.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND
SHAREHOLDERS
The Company and Shareholders jointly and severally
represent, warrant and covenant as follows:
3.1 Organization and Good Standing
(a) Part 3.1 of the Disclosure Letter contains a
complete and accurate list for the Company of its
name, its jurisdiction of incorporation, other
jurisdictions in which it is authorized to do
business, and its capitalization (including the
identity of each shareholder and the number of
shares held by each). The Company is a corporation
duly organized, validly existing, and in good
standing under the laws of its jurisdiction of
incorporation, with full corporate power and
authority to conduct its business as it is now being
conducted, to own or use the properties and assets
that it purports to own or use, and to perform all
its obligations under Applicable Contracts. Except
as disclosed in the Disclosure Letter, the Company
is duly qualified to do business as a foreign
corporation and is in good standing under the laws
of each state or other jurisdiction in which either
the ownership or use of the properties owned or used
by it, or the nature of the activities conducted by
it, requires such qualification.
(b) Shareholders have delivered to Purchaser copies of
the Organizational Documents of the Company, as
currently in effect.
3.2 Authority; No Conflict
(a) This Agreement constitutes the legal, valid, and
binding obligation of the Shareholders, enforceable
against the Shareholders in accordance with its
terms, subject to bankruptcy laws and laws affecting
the rights of creditors generally. Upon the
execution and delivery by the Shareholders of the
Escrow Agreement, the Employment Agreements, the
Shareholders' Releases, and the Noncompetition
Agreements (collectively, "Shareholders' Closing
Documents"), the Shareholders' Closing Documents
will constitute the legal, valid, and binding
obligations of the Shareholders, enforceable against
the Shareholders in accordance with their respective
terms, subject to bankruptcy laws and laws affecting
the rights of creditors generally. Each of the
Shareholders has the absolute and unrestricted
right, power, authority, and capacity to execute and
deliver this Agreement and the Shareholders' Closing
Documents and to perform their obligations under
this Agreement and the Shareholders' Closing
Documents.
(b) Except as set forth in Part 3.2 of the Disclosure
Letter, neither the execution and delivery of this
Agreement nor the consummation or performance of any
of the Contemplated Transactions will, directly or
indirectly (with or without notice or lapse of
time):
(i) contravene, conflict with, or result in a
violation of (A) any provision of the
Organizational Documents of the Company, or (B)
any resolution adopted by the board of
directors or the Shareholders of the Company;
(ii) contravene, conflict with, or result in a
violation of, or give any Governmental Body or
other Person the right to challenge any of the
Contemplated Transactions or to exercise any
remedy or obtain any relief under, any Legal
Requirement or any Order to which the Company
or any Shareholder, or any of the assets owned
or used by the Company, may be subject;
(iii) contravene, conflict with, or result in a
violation of any of the terms or requirements
of, or give any Governmental Body the right to
revoke, withdraw, suspend, cancel, terminate,
or modify, any Governmental Authorization that
is held by the Company or that otherwise
relates to the business of, or any of the
assets owned or used by, the Company;
(iv) contravene, conflict with, or result in a
violation or breach of any provision of, or
give any Person the right to declare a default
or exercise any remedy under, or to accelerate
the maturity or per-formance of, or to cancel,
terminate, or modify, any Applicable Contract;
or
(vii) result in the imposition or creation of
any Encumbrance upon or with respect to any of
the assets owned or used by the Company.
Except as set forth in Part 3.2 of the Disclosure
Letter, no Shareholder or the Company is or will be
required to give any notice to or obtain any Consent from
any Person in connection with the execution and delivery
of this Agreement or the consummation or performance of
any of the Contemplated Transactions.
3.3 Capitalizations
The authorized equity securities of the Company consist
of 10,000 shares of no par value common stock, of which 4,176
shares are issued, 2,088 shares are held as treasury shares,
and 2,088 shares are issued and outstanding and constitute the
Shares. The Shareholders are and will be on the Closing Date
the record and beneficial owners and holders of the Shares,
free and clear of all Encumbrances. The Shares are owned by
the Shareholders as follows:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 298.286 Shares
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 298.286 Shares
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 298.286 Shares
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 298.286 Shares
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 298.286 Shares
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 298.286 Shares
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 298,286 Shares
Except for restrictions on transferability, which each
Shareholder waives, and restrictions regarding applicable
securities laws, no legend or other reference to any purported
Encumbrance appears upon any certificate representing equity
securities of the Company. All of the outstanding equity
securities of the Company have been duly authorized and
validly issued and are fully paid and nonassessable. There
are no Contracts relating to the issuance, sale, or transfer
of any equity securities or other securities of the Company.
To the best of Shareholders' Knowledge, none of the
outstanding equity securities or other securities of the
Company was issued in violation of the Securities Act or any
other Legal Requirement. The Company does not own, or have
any Contract to acquire, any equity securities or other
securities of any Person, or any direct or indirect equity or
ownership interest in any other business.
3.4 Financial Statements
Shareholders have delivered to Purchaser:
(a) audited balance sheets of the Company as at December
31 in each of the years 1992 through 1995 , and the
related statements of income, changes in
Shareholders' equity, and cash flow for each of the
fiscal years then ended, together with the report
thereon of LaPorte, Sehrt, ▇▇▇▇▇ & Hand, independent
certified public accountants (the "Audited
Statements"),
(b) an unaudited balance sheet of the Company as at
August 31, 1996 (the "Interim Balance Sheet") and
the related unaudited statements of income, changes
in Shareholders' equity, and cash flow for the
months then ended.
The financial statements reflect no information
known or believed by the Company or any Shareholder to be
false, and fairly present the financial condition and the
results of operations, changes in Shareholders' equity,
and cash flow of the Company as at the respective dates
of and for the periods referred to in such financial
statements, all in accordance with GAAP, subject, in the
case of interim financial statements, to normal recurring
year-end adjustments (the effect of which will not,
individually or in the aggregate, be materially adverse),
the absence of taking physical inventories, and the
absence of notes (that, if presented, would not differ
materially from those included in the Audited
Statements). The financial statements referred to in this
Section 3.4 reflect the consistent application of such
accounting principles throughout the periods involved,
except as disclosed in the notes to such financial
statements. No financial statements of any Person other
than the Company are required by GAAP to be included in
the financial statements of the Company.
3.5 Books and Records
The Company has provided copies of the minutes of meetings of
the directors of the Company which fairly reflect all meetings
held of, and corporate action taken by, , the Board of
Directors of the Company, and no meeting of any such Board of
Directors has been held for which minutes have not been
prepared and have not been provided to Purchaser. At or prior
to Closing, the Company and Shareholders will provide
Purchaser with appropriate minutes, and/or unanimous consents
in lieu of minutes, reflecting the due elections of directors
and officers of the Company.
3.6 Title to Properties; Encumbrances
Part 3.6 of the Disclosure Letter contains a complete and
accurate list of all real property, leaseholds, or other
interests therein owned by the Company. The Company has
delivered or made available to Purchaser copies of the deeds
and other instruments (as recorded) by which the Company
acquired such real property and interests, and copies of all
title insurance policies, opinions, abstracts, and surveys in
the possession of the Company and relating to such property or
interests. The Company owns (with good and marketable title in
the case of real property, subject only to the matters
permitted by the following sentence) all the properties and
assets (whether real, personal, or mixed and whether tangible
or intangible) that it purports to own located in the
facilities owned or operated by the Company or reflected as
owned in the books and records of the Company, including all
of the properties and assets reflected in the Interim Balance
Sheet (except for assets held under capitalized leases
disclosed or not required to be disclosed in Part 3.6 of the
Disclosure Letter and personal property sold since the date of
the Interim Balance Sheet, as the case may be, in the Ordinary
Course of Business). All material properties and assets
reflected in the Interim Balance Sheet are free and clear of
all Encumbrances and are not, in the case of real property,
subject to any rights of way, building use restrictions,
exceptions, variances, reservations, or limitations of any
nature except, with respect to all such properties and assets,
(a) mortgages or security interests shown on the Interim
Balance Sheet as securing specified liabilities or
obligations, with respect to which no default (or event that,
with notice or lapse of time or both, would constitute a
default) exists, (b) mortgages or security interests incurred
in connection with the purchase of property or assets after
the date of the Interim Balance Sheet (such mortgages and
security interests being limited to the property or assets so
acquired), with respect to which no default (or event that,
with notice or lapse of time or both, would constitute a
default) exists, (c) liens for current taxes not yet due, and
(d) with respect to real property, (i) minor imperfections of
title, if any, none of which is substantial in amount,
materially detracts from the value or impairs the use of the
property subject thereto, or impairs the operations of the
Company, and (ii) zoning laws and other land use restrictions
that do not impair the present or anticipated use of the
property subject thereto. All buildings, plants, and
structures owned by the Company lie wholly within the
boundaries of the real property owned by the Company and do
not encroach upon the property of, or otherwise conflict with
the property rights of, any other Person.
3.7 Condition and Sufficiency of Assets
The buildings, plants, structures, and equipment of the
Company are structurally sound, are in good operating
condition and repair, and are adequate for the uses to which
they are being put, and none of such buildings, plants,
structures, or equipment is in need of maintenance or repairs
except for ordinary, routine maintenance and repairs that are
not material in nature or cost. The building, plants,
structures, and equipment of the Company are sufficient for
the continued conduct of the Company's business after the
Closing in substantially the same manner as conducted prior to
the Closing.
3.8 Accounts Receivable
All accounts receivable of the Company that are reflected
on the Interim Balance Sheet or on the accounting records of
the Company as of the Closing Date (collectively, the
"Accounts Receivable") represent or will represent valid
obligations arising from sales actually made or services
actually performed in the Ordinary Course of Business. The
respective reserves shown on the Interim Balance Sheet or on
the accounting records of the Company as of the Closing Date
are adequate and calculated consistent with past practice and,
in the case of the reserve as of the Closing Date, will not
represent a material adverse change in the composition of such
Accounts Receivable in terms of aging). There is no contest,
claim, or right of set-off, other than returns in the Ordinary
Course of Business, under any Contract with any obligor of an
Accounts Receivable relating to the amount or validity of such
Accounts Receivable. Part 3.8 of the Disclosure Letter
contains a complete and accurate list of all Accounts
Receivable as of the date of the Interim Balance Sheet, which
list sets forth the aging of such Accounts Receivable.
3.9 Inventory
All inventory of the Company, whether or not reflected in
the Balance Sheet or the Interim Balance Sheet, consists of a
quality and quantity usable and salable in the Ordinary Course
of Business, except for obsolete items and items of below-
standard quality, all of which have been written off or
written down to net realizable value in the Interim Balance
Sheet or on the accounting records of the Company as of the
Closing Date, as the case may be. All inventories not written
off have been priced at the lower of cost or market on a first
in, first out basis. Neither Company nor Shareholders have any
information or reasonable grounds to believe that such
inventory will not be as salable in the future as it was on
August 31, 1996.
3.10 No Undisclosed Liabilities
Except as set forth in Part 3.10 of the Disclosure Letter, the
Company has no liabilities or obligations of any nature
(whether known or unknown and whether absolute, accrued,
contingent, or otherwise) except for liabilities or
obligations reflected or reserved against in the Interim
Balance Sheet or the Closing Financial Statement, and current
liabilities incurred in the Ordinary Course of Business since
the date thereof.
3.11 Taxes
(a) The Company has filed or caused to be filed (on a
timely basis) all Tax Returns that are or were
required to be filed by or with respect to it,
pursuant to applicable Legal Requirements. The
Shareholders have delivered to Purchaser copies of,
and Part 3.11 of the Disclosure Letter contains a
complete and accurate list of, all such Tax Returns
filed since December 31, 1991. The Company has
paid, or made provision for the payment of, all
Taxes that have or may have become due pursuant to
those Tax Returns or otherwise, or pursuant to any
assessment received by the Company or the
Shareholders, except such Taxes, if any, as are
listed in Part 3.1 1 of the Disclosure Letter and
are being contested in good faith and as to which
adequate reserves (determined in accordance with
GAAP) have been provided in the Balance Sheet and
the Interim Balance Sheet.
(b) The United States federal and state income Tax
Returns of the Company have been audited by the IRS
or relevant state tax authorities or are closed by
the applicable statute of limitations for all
taxable years through 1992. Part 3.11 of the
Disclosure Letter contains a complete and accurate
list of all audits of all such Tax Returns,
including a reasonably detailed description of the
nature and outcome of each audit. All deficiencies
proposed as a result of such audits have been paid,
reserved against, settled, or, as described in Part
3.11 of the Disclosure Letter, are being contested
in good faith by appropriate proceedings. There have
been no adjustments to the United States federal
income Tax Returns filed by the Company. Except as
described in Part 3.11 of the Disclosure Letter, no
Shareholder or the Company has given or been
requested to give waivers or extensions (or is or
would be subject to a waiver or extension given by
any other Person) of any statute of limitations
relating to the payment of Taxes of the Company or
for which the Company may be liable.
(c) The charges, accruals, and reserves with respect to
Taxes on the Closing Financial Statement will be at
least equal to the Company's liability for Taxes.
There exists no proposed tax assessment against the
Company except as disclosed in the Balance Sheet or
in Part 3.11 of the Disclosure Letter. No consent
to the application of Section 341(f)(2) of the IRC
has been filed with respect to any property or
assets held, acquired, or to be acquired by the
Company. All Taxes that the Company is or was
required by Legal Requirements to withhold or
collect have been duly withheld or collected and, to
the extent required, have been paid to the proper
Governmental Body or other Person.
(d) All Tax Returns filed by the Company are, to the
best of the Company's and Shareholders' knowledge
and belief, true, correct, and complete. There is
no tax sharing agreement that will require any
payment by the Company after the date of this
Agreement. The Company is not, nor within the five-
year period preceding the Closing Date has been, an
"S" corporation.
3.12 No Material Adverse Change
Since the date of the Interim Balance Sheet, there has
not been any material adverse change in the business,
operations, properties, prospects, assets, or condition of the
Company, and, to the best of the Company's and Shareholder's
knowledge and belief, no event has occurred or circumstance
exists that may result in such a material adverse change.
3.13 Employee Benefits
(a) As used in this Section 3.13, the following terms
have the meanings set forth below.
"Company Other Benefit Obligation" means an Other Benefit
Obligation owed, adopted, or followed by the Company
or an ERISA Affiliate of the Company.
"Company Plan" means all Plans of which the Company or an
ERISA Affiliate of the Company is or was a Plan
Sponsor, or to which the Company or an ERISA
Affiliate of the Company otherwise contributes or
has contributed, or in which the Company or an ERISA
Affiliate of the Company otherwise participates or
has participated. All references to Plans are to
Company Plans unless the context requires otherwise.
"ERISA Affiliate" means, with respect to the Company, any
other person that, together with the Company, would
be treated as a single employer under IRC 414.
"Multi-Employer Plan" has the meaning given in ERISA
3(37)(A).
"Other Benefit Obligations" means all obligations,
arrangements, or customary practices, whether or not
legally enforceable, to provide benefits, other than
salary, as compensation for services rendered, to
present or former directors, employees, or agents,
other than obligations, arrangements, and practices
that are Plans. Other Benefit Obligations include
consulting agreements under which the compensation
paid does not depend upon the amount of service
rendered, sabbatical policies, severance payment
policies, and fringe benefits within the meaning of
IRC 132.
"PBGC" means the Pension Benefit Guaranty Corporation, or
any successor thereto.
"Pension Plan" has the meaning given in ERISA 3(2)(A).
"Plan" has the meaning given in ERISA 3(3).
"Plan Sponsor" has the meaning given in ERISA 3(1
6)(B).
"Qualified Plan" means any Plan that meets or purports
to meet the requirements of IRC 401(a).
"Title IV Plans" means all Pension Plans that are
subject to Title IV of ERISA, 29 U.S.C. 1301 et
seq., other than Multi-Employer Plans.
"VEBA" means a voluntary employees' beneficiary
association under IRC 501(c)(9).
"Welfare Plan " has the meaning given in ERISA 3(1).
(b) (i) Part 3.13(i) of the Disclosure Letter
contains a complete and accurate list of all
Company Plans and Company Other Benefit
Obligations, and identifies as such all Company
Plans that are (A) defined benefit Pension
Plans, (B) Qualified Plans, (C) Title IV Plans,
or (D) Multi-Employer Plans.
(ii) Part 3.13(ii) of the Disclosure Letter
contains a complete and accurate list of (A)
all ERISA Affiliates of the Company, and (B)
all Plans of which any such ERISA Affiliate is
or was a Plan Sponsor, in which any such ERISA
Affiliate participates or has participated, or
to which any such ERISA Affiliate contributes
or has contributed.
(iii) Part 3.13(iii) of the Disclosure Letter
sets forth the financial cost of all
obligations owed under any Company Plan or
Company Other Benefit Obligation that is not
subject to the disclosure and reporting
requirements of ERISA.
(c) The Company has delivered to Purchaser, or will
deliver to Purchaser within ten days of the date of
this Agreement:
(i) all documents that set forth the terms of each
Company Plan or Company Other Benefit
Obligation, and of any related trust, including
(A) all plan descriptions and summary plan
descriptions of Company Plans for which the
Shareholders or the Company are required to
prepare, file, and distribute plan descriptions
and summary plan descriptions, and (B) all
summaries and descriptions furnished to
participants and beneficiaries regarding
Company Plans and Company Other Benefit
Obligations for which a plan description or
summary plan description is not required;
(ii) all personnel, payroll, and employment
manuals and policies;
(iii) a written description of any Company Plan
or Company Other Benefit Obligation that is not
otherwise in writing;
(iv) all insurance policies purchased by or to
provide benefits under any Company Plan;
(v) all contracts with third party administrators,
actuaries, investment managers, consultants,
and other independent contractors that relate
to any Company Plan or Company Other Benefit
Obligation;
(vi) all reports submitted within the four
years preceding the date of this Agreement by
third party administrators, actuaries,
investment managers, consultants, or other
independent contractors with respect to any
Company Plan or Company Other Benefit
Obligation;
(vii) all notifications to employees of their
rights under ERISA 601 et seq. and IRC
4980B within the three-year period preceding
the date of this Agreement;
(viii) the Form 5500 filed in each of the most
recent three plan years with respect to each
Company Plan, including all schedules thereto
and the opinions of independent accountants;
and
(ix) with respect to Qualified Plans, the most
recent determination letter for each Plan of
the Company that is a Qualified Plan.
(d) Except as set forth in Part 3.13(d) of the
Disclosure Letter:
(i) The Company has performed all of its
obligations under all Company Plans and Company
Other Benefit Obligations. The Company has
made appropriate entries in their financial
records and statements for all obligations and
liabilities under such Company Plans and
Obligations that have accrued but are not due.
(ii) No statement, either written or oral, has
been made by the Company to any Person with
regard to any Company Plan or Company Other
Benefit Obligation that was not in accordance
with the Plan or Other Benefit Obligation and
that could have an adverse economic consequence
to the Company or to Purchaser.
(iii) The Company, with respect to all Company
Plans and Company Other Benefits Obligations
is, and each Company Plan and Company Other
Benefit Obligation is, in full compliance with
ERISA, the IRC, and other applicable Laws
including the provisions of such Laws expressly
mentioned in this Section 3.13.
(A) No transaction prohibited by ERISA 406
and no "prohibited transaction" under IRC
4975(c) have occurred with respect to
any Company Plan.
(B) No Shareholder or the Company has any
liability to the IRS with respect to any
Plan, including any liability imposed by
Chapter 43 of the IRC.
(C) No Shareholder or the Company has any
liability to the PBGC with respect to any
Plan or has any liability under ERISA
502 or 4071.
(D) Except for the filing of Form 5500 for
1995, which is presently under authorized
extension and will be filed prior to
Closing, all filings required by ERISA and
the IRC as to each Company Plan have been
timely filed, and all notices and
disclosures to participants required by
either ERISA or the IRC have been timely
provided.
(E) All contributions and payments made or
accrued with respect to all Company Plans
and Company Other Benefit Obligations are
deductible under IRC 162 or 404. No
amount, or any asset of any Company Plan
is subject to tax as unrelated business
taxable income.
(iv) Since July 1, 1996, there has been no
establishment or amendment of any Company Plan
or Company Other Benefit Obligation.
(v) No event has occurred or circumstance exists
that could result in a material increase in
premium costs of Company Plans and Company
Other Benefit Obligations that are insured, or
a material increase in benefit costs of such
Company Plans and Company Other Benefit
Obligations that are self-insured.
(vi) Other than claims for benefits submitted
by participants or beneficiaries, no claim
against, or legal proceeding involving, any
Company Plan or Company Other Benefit
Obligation is pending or, to the Company's or
Shareholders' Knowledge, is Threatened.
(vii) No Company Plan is a stock bonus or
pension plan within the meaning of IRC
401(a).
(viii) Each Qualified Plan of the Company is
qualified in form and operation under IRC
401(a); each trust for each such Plan is exempt
from federal income tax under IRC 501(a). No
event has occurred or circumstance exists that
will or could give rise to disqualification or
loss of tax-exempt status of any such Plan or
trust.
(ix) The Company and each ERISA Affiliate of
the Company has met the minimum funding
standard, and has made all contributions
required, under ERISA 302 and IRC 402.
(x) No Company Plan is subject to Title IV of
ERISA.
(xi) Neither the Company nor any ERISA
Affiliate of the Company has filed a notice of
intent to terminate any Plan or has adopted any
amendment to treat a Plan as terminated.
(xii) Neither the Company nor any ERISA
Affiliate of the Company has ever established,
maintained, or contributed to or otherwise
participated in, or had an obligation to
maintain, contribute to, or otherwise
participate in, any Multi-Employer Plan.
(xii) Neither the Company nor any ERISA
Affiliate of the Company is a sponsor of or is
required to make any contribution to any VEBA,
including any VEBA where members may include
employees of the Company or any ERISA Affiliate
of the Company.
(xiii) Neither the Company nor any ERISA
Affiliate of the Company has made contributions
or incurred obligations (including both pension
and welfare benefits) or is obligated to make
any contribution or provide any benefit under
any collective bargaining agreement.
(xiv) Except to the extent required under ERISA
601 et seq. and IRC 4980B, the Company
provides no health or welfare benefits for any
retired or former employee or is obligated to
provide health or welfare benefits to any
active employee following such employee's
retirement or other termination of service.
(xv) The Company has the right to modify and
terminate benefits to retirees (other than
pensions) with respect to both retired and
active employees.
(xvi) The Company has complied with the
provisions of ERISA 601 et seq. and IRC
4980B.
(xvii) No payment that is owed or may become due
to any director, officer, employee, or agent of
the Company will be non-deductible to the
Company or subject to tax under IRC 280G or
4999; nor will the Company be required to
"gross up" or otherwise compensate any such
person because of the imposition of any excise
tax on a payment to such person.
(xviii) The consummation of the Contemplated
Transactions will not result in the payment,
vesting, or acceleration of any benefit.
3.14 Compliance With Legal Requirements; Governmental
Authorizations
(a) Except as set forth in Part 3.14 of the Disclosure
Letter:
(i) the Company is, and at all times since December
31, 1991, has been, in full compliance with
each Legal Requirement that is or was
applicable to it or to the conduct or operation
of its business or the ownership or use of any
of its assets, except where any noncompliance
does not have a material adverse effect on the
operations or assets of the Company;
(ii) except where violations or failure would
not have a material adverse effect on the
operations or assets of the Company, no event
has occurred or circumstance exists that (with
or without notice or lapse of time) (A) may
constitute or result in a violation by the
Company of, or a failure on the part of the
Company to comply with, any Legal Requirement,
or (B) may give rise to any obligation on the
part of the Company to undertake, or to bear
all or any portion of the cost of, any remedial
action of any nature; and
(iii) the Company has not received, at any time
since December 31, 1991, any notice or other
communication (whether oral or written) from
any Governmental Body or any other Person
regarding (A) any actual, alleged, possible, or
potential violation of, or failure to comply
with, any Legal Requirement, or (B) any actual,
alleged, possible, or potential obligation on
the part of the Company to undertake, or to
bear all or any portion of the cost of, any
remedial action of any nature.
(b) Part 3.14 of the Disclosure Letter contains a
complete and accurate list of each Governmental
Authorization that is held by the Company or that
otherwise relates to the business of, or to any of
the assets owned or used by, the Company. Each
Governmental Authorization listed or required to be
listed in Part 3.14 of the Disclosure Letter is
valid and in full force and effect. Except as set
forth in Part 3.14 of the Disclosure Letter:
(i) the Company is, and at all times since December
31, 1991 has been, in material compliance with
all of the terms and requirements of each
Governmental Authorization identified or
required to be identified in Part 3.14 of the
Disclosure Letter;
(ii) no event has occurred or circumstance
exists that may (with or without notice or
lapse of time) (A) constitute or result
directly or indirectly in a violation of or a
failure to comply with any term or requirement
of any Governmental Authorization listed or
required to be listed in Part 3.14 of the
Disclosure Letter, or (B) result directly or
indirectly in the revocation, withdrawal,
suspension, cancellation, or termination of, or
any modification to, any Governmental
Authorization listed or required to be listed
in Part 3.14 of the Disclosure Letter;
(iii) the Company has not received, at any time
since December 31, 1991, any notice or other
communication (whether oral or written) from
any Governmental Body or any other Person
regarding (A) any actual, alleged, possible, or
potential violation of or failure to comply
with any term or requirement of any
Governmental Authorization, or (B) any actual,
proposed, possible, or potential revocation,
withdrawal, suspension, cancellation,
termination of, or modification to any
Governmental Authorization; and
(iv) all applications required to have been
filed for the renewal of the Governmental
Authorizations listed or required to be listed
in Part 3.14 of the Disclosure Letter have been
duly filed on a timely basis with the
appropriate Governmental Bodies, and all other
filings required to have been made with respect
to such Governmental Authorizations have been
duly made on a timely basis with the
appropriate Governmental Bodies.
The Governmental Authorizations listed in Part 3.14 of
the Disclosure Letter collectively constitute all of the
Governmental Authorizations necessary to permit the Company to
lawfully conduct and operate its businesses in the manner it
currently conducts and operates such business and to permit
the Company to own and use its assets in the manner in which
it currently owns and uses such assets, except where the
failure to obtain such Governmental Authorization does not or
will not have a material adverse effect on the operations or
assets of the Company.
3.15 Legal Proceedings; Orders
(a) Except as set forth in Part 3 .15 of the
Disclosure Letter, there is no pending Proceeding:
(i) that has been commenced by or against the
Company or that otherwise relates to or may
affect the business of, or any of the assets
owned or used by, the Company; or
(ii) that challenges, or that may have the
effect of preventing, delaying, making illegal,
or otherwise interfering with, any of the
Contemplated Transactions.
To the Knowledge of Shareholders and the Company, (1) no
such Proceeding has been Threatened, and (2) no event has
occurred or circumstance exists that may give rise to or serve
as a basis for the commencement of any such Proceeding.
Shareholders have delivered to Purchaser copies of all
pleadings, correspondence, and other documents relating to
each Proceeding listed in Part 3.15 of the Disclosure Letter.
The Proceedings listed in Part 3.15 of the Disclosure Letter
will not have a material adverse effect on the business,
operations, assets, condition, or prospects of the Company.
(b) Except as set forth in Part 3.15 of the Disclosure
Letter:
(i) there is no Order to which the Company, or any
of the assets owned or used by the Company, is
subject;
(ii) no Shareholder is subject to any Order
that relates to the business of, or any of the
assets owned or used by, the Company; and
(iii) no officer, director, agent, or employee
of the Company is subject to any Order that
prohibits such officer, director, agent, or
employee from engaging in or continuing any
conduct, activity, or practice relating to the
business of the Company.
(c) Except as set forth in Part 3.15 of the Disclosure
Letter:
(i) the Company is, and at all times since December
31, 1991 has been, in full compliance with all
of the terms and requirements of each Order to
which it, or any of the assets owned or used by
it, is or has been subject;
(ii) no event has occurred or circumstance
exists that may constitute or result in (with
or without notice or lapse of time) a violation
of or failure to comply with any term or
requirement of any Order to which the Company,
or any of the assets owned or used by the
Company, is subject; and
(iii) the Company has not received, at any time
since December 31, 1991, any notice or other
communication (whether oral or written) from
any Governmental Body or any other Person
regarding any actual, alleged, possible, or
potential violation of, or failure to comply
with, any term or requirement of any Order to
which the Company, or any of the assets owned
or used by the Company, is or has been subject.
3.16 Absence of Certain Changes and Events
Except as set forth in Part 3.16 of the Disclosure
Letter, since the date of the Audited Financial Statements,
the Company has conducted its business only in the Ordinary
Course of Business and there has not been any:
(a) change in the Company's authorized or issued capital
stock; grant of any stock option or right to
purchase shares of capital stock of the Company;
issuance of any security convertible into such
capital stock; grant of any registration rights;
purchase, redemption, retirement, or other
acquisition by the Company of any shares of any such
capital stock; or declaration or payment of any
dividend or other distribution or payment in respect
of shares of capital stock;
(b) amendment to the Organizational Documents of the
Company;
(c) payment or increase by the Company of any bonuses,
salaries, or other compensation to any shareholder,
director, officer, or (except in the Ordinary Course
of Business) employee or entry into any employment,
severance, or similar Contract with any director,
officer, or employee;
(d) adoption of, or increase in the payments to or
benefits under, any profit sharing, bonus, deferred
compensation, savings, insurance, pension,
retirement, or other employee benefit plan for or
with any employees of the Company;
(e) damage to or destruction or loss of any asset or
property of the Company, whether or not covered by
insurance, materially and adversely affecting the
properties, assets, business, financial condition,
or prospects of the Company, taken as a whole;
(f) entry into, termination of, or receipt of notice of
termination of (i) any license, distributorship,
dealer, sales representative, joint venture, credit,
or similar agreement, or (ii) any Contract or
transaction involving a total remaining commitment
by or to the Company of at least $100,000.00;
(g) sale (other than sales of inventory in the Ordinary
Course of Business), lease, or other disposition of
any asset or property of the Company or mortgage,
pledge, or imposition of any lien or other
encumbrance on any material asset or property of the
Company, including the sale, lease, or other
disposition of any of the Intellectual Property
Assets;
(h) cancellation or waiver of any claims or rights with
a value to the Company in excess of $100,000.00;
(i) material change in the accounting methods used by
the Company; or
(j) agreement, whether oral or written, by the Company
to do any of the foregoing.
3.17 Contracts; No Defaults
(a) Part 3 . l 7(a) of the Disclosure Letter contains a
complete and accurate list, and Shareholders have
delivered to Purchaser true and complete copies, of:
(i) each Applicable Contract that involves
performance of services or delivery of goods or
materials by the Company of an amount or value
in excess of $ 15,000.00;
(ii) each Applicable Contract that involves
performance of services or delivery of goods or
materials to the Company of an amount or value
in excess of $ 15,000.00;
(iii) each Applicable Contract that was not
entered into in the Ordinary Course of Business
and that involves expenditures or receipts of
the Company in excess of $ 15,000.00
(iv) each lease, rental or occupancy agreement,
license, installment and conditional sale
agreement, and other Applicable Contract
affecting the ownership of, leasing of, title
to, use of, or any leasehold or other interest
in, any real or personal property (except
personal property leases and installment and
conditional sales agreements having a value per
item or aggregate payments of less than
$10,000.00 and with terms of less than
one year);
(v) each licensing agreement or other Applicable
Contract with respect to patents, trademarks,
copyrights, or other intellectual property,
including agreements with current or former
employees, consultants, or contractors
regarding the appropriation or the
nondisclosure of any of the Intellectual
Property Assets;
(vi) each collective bargaining agreement and
other Applicable Contract to or with any labor
union or other employee representative of a
group of employees;
(vii) each joint venture, partnership, and other
Applicable Contract (however named) involving a
sharing of profits, losses, costs, or
liabilities by the Company with any other
Person;
(viii) each Applicable Contract containing
covenants that in any way purport to restrict
the business activity of the Company or any
Affiliate of the Company or limit the freedom
of the Company or any Affiliate of the Company
to engage in any line of business or to compete
with any Person;
(ix) each Applicable Contract providing for
payments to or by any Person based on sales,
purchases, or profits, other than direct
payments for goods;
(x) each power of attorney that is currently
effective and outstanding;
(xi) each Applicable Contract entered into
other than in the Ordinary Course of Business
that contains or provides for an express
undertaking by the Company to be responsible
for consequential damages;
(xii) each Applicable Contract for capital
expenditures, including any Contract for
computer and telephone systems hardware and
software, and any other Contract in excess of
$15,000.00;
(xiii) each written warranty, guaranty, and or
other similar undertaking with respect to
contractual performance extended by the Company
other than in the Ordinary Course of Business;
and
(xiv) each amendment, supplement, and
modification (whether oral or written) in
respect of any of the foregoing. Part 3.17(a)
of the Disclosure Letter sets forth reasonably
complete details concerning such Contracts,
including the parties to the Contracts, the
amount of the remaining commitment of the
Company under the Contracts, and the Company's
office where details relating to the Contracts
are located.
(b) Except as set forth in Part 3.17(b) of the
Disclosure Letter:
(i) no Shareholder (and no Related Person of any
Shareholder) has or may acquire any rights
under, and no Shareholder has or may become
subject to any obligation or liability under,
any Contract that relates to the business of,
or any of the assets owned or used by, the
Company; and
(ii) no officer, director, agent, employee,
consultant, or contractor of the Company is
bound by any Contract that purports to limit
the ability of such officer, director, agent,
employee, consultant, or contractor to (A)
engage in or continue any conduct, activity, or
practice relating to the business of the
Company, or (B) assign to the Company or to any
other Person any rights to any invention,
improvement, or discovery.
(c) Except as set forth in Part 3.17(c) of the
Disclosure Letter, each Contract identified or
required to be identified in Part 3.17(a) of the
Disclosure Letter is in full force and effect and is
valid and enforceable in accordance with its terms.
(d) Except as set forth in Part 3.17(d) of the
Disclosure Letter:
(i) the Company is, and at all times since December
31,1991 has been, in full compliance with all
applicable terms and requirements of each
Contract under which the Company has or had any
obligation or liability or by which the Company
or any of the assets owned or used by the
Company is or was bound;
(ii) each other Person that has or had any
obligation or liability under any Contract
under which the Company has or had any rights
is, and at all times since December 31, 1991
has been, in full compliance with all
applicable terms and requirements of such
Contract;
(iii) no event has occurred or circumstance
exists that (with or without notice or lapse of
time) may contravene, conflict with, or result
in a violation or breach of, or give the
Company or other Person the right to declare a
default or exercise any remedy under, or to
accelerate the maturity or performance of, or
to cancel, terminate, or modify, any Applicable
Contract; and
(iv) the Company has not given to or received
from any other Person, at any time since
December 31, 1991, any notice or other
communication (whether oral or written)
regarding any actual, alleged, possible, or
potential violation or breach of, or default
under, any Contract.
(e) There are no renegotiations of, attempts to
renegotiate, or outstanding rights to renegotiate
any material amounts paid or payable to the Company
under current or completed Contracts with any Person
and no such Person has made written demand for such
renegotiation.
(f) The Contracts relating to the sale, design,
manufacture, or provision of products or services by
the Company have been entered into in the Ordinary
Course of Business and have been entered into
without the commission of any act alone or in
concert with any other Person, or any consideration
having been paid or promised, that is or would be in
violation of any Legal Requirement.
3.18 Insurance
(a) Shareholders have delivered to Purchaser:
(i) true and complete copies of all policies of
insurance to which the Company is a party or
under which the Company, or any director of the
Company, is or has been covered at any time
within the five years preceding the date of
this Agreement;
(ii) true and complete copies of all pending
applications for policies of insurance; and
(iii) any statement by the auditor of the
Company's financial statements with regard to
the adequacy of such entity's coverage or of
the reserves for claims.
(b) Part 3.18(b) of the Disclosure Letter describes:
(i) any self-insurance arrangement by or affecting
the Company, including any reserves established
thereunder;
(ii) any contract or arrangement, other than a
policy of insurance, for the transfer or
sharing of any risk by the Company; and
(iii) all obligations of the Company to third
parties with respect to insurance (including
such obligations under leases and service
agreements) and identifies the policy under
which such coverage is provided.
(c) Part 3.18(c) of the Disclosure Letter sets forth, by
year, for the current policy year and each of the 3
preceding policy years:
(i) a summary of the loss experience under each
policy;
(ii) a statement describing each claim under an
insurance policy for an amount in excess of $
, which sets forth:
(A) the name of the claimant;
(B) a description of the policy by insurer,
type of insurance, and period of coverage;
and
(C) the amount and a brief description of the
claim; and
(iii) a statement describing the loss experience
for all claims that were self-insured,
including the number and aggregate cost of such
claims.
(d) Except as set forth on Part 3.18(d) of the
Disclosure Letter:
(i) All policies to which the Company is a party or
that provide coverage to any Shareholder, the
Company, or any director or officer of the
Company:
(A) are valid, outstanding, and enforceable;
(B) are issued by an insurer that is
financially sound and reputable;
(C) taken together, provide adequate insurance
coverage for the assets and the operations
of the Company for all risks normally
insured against by a Person carrying on
the same business or businesses as the
Company;
(D) are sufficient for compliance with all
Legal Requirements and Contracts to which
the Company is a party or by which it is
bound;
(E) will continue in full force and effect
following the consummation of the
Contemplated Transactions; and
(F) do not provide for any retrospective
premium adjustment or other experienced-
based liability on the part of the
Company.
(ii) No Shareholder or the Company has received
(A) any refusal of coverage or any notice that
a defense will be afforded with reservation of
rights, or (B) any notice of cancellation or
any other indication that any insurance policy
is no longer in full force or effect or will
not be renewed or that the issuer of any policy
is not willing or able to perform its
obligations thereunder.
(iii) The Company has paid all premiums due, and
has otherwise performed all of its obligations,
under each policy to which the Company is a
party or that provides coverage to the Company
or any officer or director thereof.
(iv) The Company has given notice to the
insurer of all claims that may be insured
thereby.
3.19 Environmental Matters
Except as set forth in part 3.19 of the disclosure
letter:
(a) the Company is, and at all times has been, in full
compliance with, and has not been and is not in
violation of or liable under, any Environmental Law.
No Shareholder or the Company has any basis to
expect, nor has any of them or any other Person for
whose conduct they are or may be held to be
responsible received, any actual or Threatened
order, notice, or other communication from (I) any
Governmental Body or private citizen acting in the
public interest, or (ii) the current or prior owner
or operator of any Facilities, of any actual or
potential violation or failure to comply with any
Environmental Law, or of any actual or Threatened
obligation to undertake or bear the cost of any
Environmental, Health, and Safety Liabilities with
respect to any of the Facilities or any other
properties or assets (whether real, personal, or
mixed) in which Shareholders or the Company has had
an interest, or with respect to any property or
Facility at or to which Hazardous Materials were
generated, manufactured, refined, transferred,
imported, used, or processed by Shareholders, the
Company, or any other Person for whose conduct they
are or may be held responsible, or from which
Hazardous Materials have been transported, treated,
stored, handled, transferred, disposed, recycled, or
received.
(b) There are no pending or, to the Knowledge of
Shareholders and the Company, Threatened claims,
Encumbrances, or other restrictions of any nature,
resulting from any Environmental, Health, and Safety
Liabilities or arising under or pursuant to any
Environmental Law, with respect to or affecting any
of the Facilities or any other properties and assets
(whether real, personal, or mixed) in which
Shareholders or the Company has or had an interest.
(c) No Shareholder or the Company has Knowledge of any
basis to expect, nor has any of them or any other
Person for whose conduct they are or may be held
responsible, received, any citation, directive,
inquiry, notice, Order, summons, warning, or other
communication that relates to Hazardous Activity,
Hazardous Materials, or any alleged, actual, or
potential violation or failure to comply with any
Environmental Law, or of any alleged, actual, or
potential obligation to undertake or bear the cost
of any Environmental, Health, and Safety Liabilities
with respect to any of the Facilities or any other
properties or assets (whether real, personal, or
mixed) in which Shareholders or the Company had an
interest, or with respect to any property or
facility to which Hazardous Materials generated,
manufactured, refined, transferred, imported, used,
or processed by Shareholders, the Company, or any
other Person for whose conduct they are or may be
held responsible, have been transported, treated,
stored, handled, transferred, disposed, recycled, or
received.
(d) No Shareholder or the Company, or any other Person
for whose conduct they are or may be held
responsible, has any Environmental, Health, and
Safety Liabilities with respect to the Facilities or
with respect to any other properties and assets
(whether real, personal, or mixed) in which
Shareholders or the Company (or any predecessor),
has or had an interest, or at any property
geologically or hydrologically adjoining the
Facilities or any such other property or assets.
(e) There are no Hazardous Materials present on or in
the Environment at the Facilities or at any
geologically or hydrologically adjoining property,
including any Hazardous Materials contained in
barrels, above or underground storage tanks,
landfills, land deposits, dumps, equipment (whether
moveable or fixed) or other containers, either
temporary or permanent, and deposited or located in
land, water, sumps, or any other part of the
Facilities or such adjoining property, or
incorporated into any structure therein or thereon.
No Shareholder, the Company, any other Person for
whose conduct they are or may be held responsible,
or any other Person, has permitted or conducted, or
is aware of, any Hazardous Activity conducted with
respect to the Facilities or any other properties or
assets (whether real, personal, or mixed) in which
Shareholders or the Company has or had an interest
except in full compliance with all applicable
Environmental Laws.
(f) There has been no Release or, to the Knowledge of
Shareholders and the Company, Threat of Release, of
any Hazardous Materials at or from the Facilities or
at any other locations where any Hazardous Materials
were generated, manufactured, refined, transferred,
produced, imported, used, or processed from or by
the Facilities, or from or by any other properties
and assets (whether real, personal, or mixed) in
which Shareholders or the Company has or had an
interest, or any geologically or hydrologically
adjoining property, whether by Shareholders, the
Company, or any other Person.
(g) Shareholders have delivered to Purchaser true and
complete copies and results of any reports, studies,
analyses, tests, or monitoring possessed or
initiated by Shareholders or the Company pertaining
to Hazardous Materials or Hazardous Activities in,
on, or under the Facilities, or concerning
compliance by Shareholders, the Company, or any
other Person for whose conduct they are or may be
held responsible, with Environmental Laws.
3.20 Employees
(a) The Company has provided Purchaser a list of
employees and their current pay rates, as well as W-
2 forms for each employee for 1995. Part 3.20 of
the Disclosure Letter contains a complete and
accurate list of the following additional
information for each employee of the Company;
vacation accrued; and service credited for purposes
of vesting and eligibility to participate under any
Company profit-sharing, severance pay, insurance,
medical, welfare, or vacation plan, or any other
employee benefit plan.
(b) No employee or director of the Company is a party
to, or is otherwise bound by, any agreement or
arrangement, including any confidentiality,
noncompetition, or proprietary rights agreement,
between such employee or director and any other
Person ("Proprietary Rights Agreement") that in any
way adversely affects or will affect (i) the
performance of his duties as an employee or director
of the Company, or (ii) the ability of the Company
to conduct its business, including any Proprietary
Rights Agreement with Shareholders or the Company by
any such employee or director. To Shareholders'
Knowledge, no director, officer, or other key
employee of the Company intends to terminate his
employment with the Company.
(c) Part 3.20 of the Disclosure Letter also contains a
complete and accurate list of the following
information for each retired employee or director of
the Company, or their dependents, receiving benefits
or scheduled to receive benefits in the future:
name, pension benefit, pension option election,
retiree medical insurance coverage, retiree life
insurance coverage, and other benefits.
(d) Part 3.20 of the Disclosure Letter contains a
complete and accurate list of each employment
agreement between the Company and any officer or
employee.
3.21 Labor Relations; Compliance
The Company has not been or is a party to any collective
bargaining or other labor Contract. Since December 31, 1991,
there has not been, there is not presently pending or
existing, and there is not Threatened, (a) any strike,
slowdown, picketing, work stoppage, or employee grievance
process, (b) any Proceeding against or affecting the Company
relating to the alleged violation of any Legal Requirement
pertaining to labor relations or employment matters, including
any charge or complaint filed by an employee or union with the
National Labor Relations Board, the Equal Employment
Opportunity Commission, or any comparable Governmental Body,
organizational activity, or other labor or employment dispute
against or affecting the Company or its premises, or (c) any
application for certification of a collective bargaining
agent. To the Company's and Shareholders' Knowledge no event
has occurred or circumstance exists that could provide the
basis for any work stoppage or other labor dispute. There is
no lockout of any employees by the Company, and no such action
is contemplated by the Company. The Company has complied in
all respects with all Legal Requirements relating to
employment, equal employment opportunity, nondiscrimination,
immigration, wages, hours, benefits, collective bargaining,
the payment of social security and similar taxes, occupational
safety and health, and plant closing. The Company is not
liable for the payment of any compensation, damages, taxes,
fines, penalties, or other amounts, however designated, for
failure to comply with any of the foregoing Legal
Requirements.
3.22 Intellectual Property
(a) Intellectual Property Assets - The term
"Intellectual Property Assets" includes:
(i) the Company's name, all fictional business
names, trading names, registered and
unregistered trademarks, service marks, and
applications (collectively, "Marks");
(ii) all patents, patent applications, and
inventions and discoveries that may be
patentable (collectively, "Patents");
(iii) all copyrights in both published works and
unpublished works (collectively, "Copyrights");
(iv) all rights in mask works (collectively,
"Rights in Mask Works"); and
(v) all know-how, trade secrets, confidential
information, customer lists, software,
technical information, data, process
technology, plans, drawings, and blue prints
(collectively, "Trade Secrets"); owned, used,
or licensed by the Company as licensee or
licensor.
(b) Agreements - Part 3.22(b) of the Disclosure Letter
contains a complete and accurate list and summary
description, including any royalties paid or
received by the Company, of all Contracts relating
to the Intellectual Property Assets to which the
Company is a party or by which the Company is bound,
except for any license implied by the sale of a
product and perpetual, paid-up licenses for commonly
available software programs with a value of less
than $15,000.00 under which the Company is the
licensee. There are no outstanding and, to
Shareholders' Knowledge, no Threatened disputes or
disagreements with respect to any such agreement.
(c) Know-How Necessary for the Business
The Intellectual Property Assets are all those
necessary for the operation of the Company's
business as it is currently conducted. The Company
is the owner of all right, title, and interest in
and to each of the Intellectual Property Assets,
free and clear of all liens, security interests,
charges, encumbrances, equities, and other adverse
claims, and has the right to use without payment to
a third party all of the Intellectual Property
Assets.
(d) Patents
(i) Part 3.22(d) of the Disclosure Letter contains
a complete and accurate list and summary
description of all Patents. The Company is the
owner of all right, title, and interest in and
to each of the Patents, free and clear of all
liens, security interests, charges,
encumbrances, entities, and other adverse
claims.
(ii) All of the issued Patents are currently in
compliance with formal legal requirements
(including payment of filing, examination, and
maintenance fees and proofs of working or use),
are valid and enforceable, and are not subject
to any maintenance fees or taxes or actions
falling due within ninety days after the
Closing Date.
(iii) No Patent has been or is now involved in
any interference, reissue, reexamination, or
opposition proceeding. To Shareholders'
Knowledge, there is no potentially interfering
patent or patent application of any third
party.
(iv) No Patent is infringed or, to
Shareholders' Knowledge, has been challenged or
threatened in any way. None of the products
manufactured and sold, nor any process or know-
how used, by the Company infringes or is
alleged to infringe any patent or other
proprietary right of any other Person.
(v) All products made, used, or sold under the
Patents have been marked with the proper patent
notice.
(e) Trademarks
(i) Part 3.22(e) of Disclosure Letter contains a
complete and accurate list and summary
description of all Marks. The Company is the
owner of all right, title, and interest in and
to each of the Marks, free and clear of all
liens, security interests, charges,
encumbrances, equities, and other adverse
claims.
(ii) All Marks that have been registered with
the United States Patent and Trademark Office
are currently in compliance with all formal
legal requirements (including the timely
postregistration filing of affidavits of use
and incontestability and renewal applications),
are valid and enforceable, and are not subject
to any maintenance fees or taxes or actions
falling due within ninety days after the
Closing Date.
(iii) No ▇▇▇▇ has been or is now involved in any
opposition, invalidation, or cancellation and,
to Shareholders' Knowledge, no such action is
Threatened with the respect to any of the
Marks.
(iv) To Shareholders' Knowledge, there is no
potentially interfering trademark or trademark
application of any third party.
(v) No ▇▇▇▇ is infringed or, to Shareholders'
Knowledge, has been challenged or threatened in
any way. None of the Marks used by the Company
infringes or is alleged to infringe any trade
name, trademark, or service ▇▇▇▇ of any third
party.
(vi) All products and materials containing a
▇▇▇▇ ▇▇▇▇ the proper federal registration
notice where permitted by law.
(f) Copyrights
(i) Part 3.22(f) of the Disclosure Letter contains
a complete and accurate list and summary
description of all Copyrights. The Company is
the owner of all right, title, and interest in
and to each of the Copyrights, free and clear
of all liens, security interests, charges,
encumbrances, equities, and other adverse
claims.
(ii) All the Copyrights have been registered
and are currently in compliance with formal
legal requirements, are valid and enforceable,
and are not subject to any maintenance fees or
taxes or actions falling due within ninety days
after the date of Closing.
(iii) No Copyright is infringed or, to
Shareholders' Knowledge, has been challenged or
threatened in any way. None of the subject
matter of any of the Copyrights infringes or is
alleged to infringe any copyright of any third
party or is a derivative work based on the work
of a third party.
(iv) All works encompassed by the Copyrights
have been marked with the proper copyright
notice.
(g) Trade Secrets
(i) With respect to each Trade Secret, the
documentation relating to such Trade Secret is
current, accurate, and sufficient in detail and
content to identify and explain it and to allow
its full and proper use without reliance on the
knowledge or memory of any individual.
(ii) Shareholders and the Company have taken
all reasonable precautions to protect the
secrecy, confidentiality, and value of the
Trade Secrets.
(iii) The Company has good title and an absolute
(but not necessarily exclusive) right to use
the Trade Secrets. The Trade Secrets are not
part of the public knowledge or literature,
and, to Shareholders' Knowledge, have not been
used, divulged, or appropriated either for the
benefit of any Person (other than the Company)
or to the detriment of the Company. No Trade
Secret is subject to any adverse claim or has
been challenged or threatened in any way.
(iv) No representation or warranty is made that a
court would find any Company Trade Secret to be
protectable under statutory or common law.
3.23 Certain Payments
Since December 31, 1991, neither the Company nor any
director, officer, agent, or employee of the Company, or any
other Person associated with or acting for or on behalf of the
Company, has directly or indirectly (a) made any contribution,
gift, bribe, rebate, payoff, influence payment, kickback, or
other payment to any Person, private or public, regardless of
form, whether in money, property, or services (i) to obtain
favorable treatment in securing business, (ii) to pay for
favorable treatment for business secured, (iii) to obtain
special concessions or for special concessions already
obtained, for or in respect of the Company or any Affiliate of
the Company, or (iv) in violation of any Legal Requirement,
(b) established or maintained any fund or asset that has not
been recorded in the books and records of the Company.
3.24 Disclosure
(a) No representation or warranty of the Company or
Shareholders in this Agreement and no statement in
the Disclosure Letter omits to state a material fact
necessary to make the statements herein or therein,
in light of the circumstances in which they were
made, not misleading.
(b) No notice given pursuant to Section 5.5 will contain
any untrue statement or omit to state a material
fact necessary to make the statements therein or in
this Agreement, in light of the circumstances in
which they were made, not misleading.
(c) There is no fact known to the Company or any
Shareholder that has specific application to any
Shareholders or the Company (other than general
economic or industry conditions) and that materially
adversely affects or, as far as the Company or any
Shareholder can reasonably foresee, materially
threatens, the assets, business, prospects,
financial condition, or results of operations of the
Company that has not been set forth in this
Agreement or the Disclosure Letter.
3.25 Relationships With Related Persons
Except for the lease of the Facility at ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ between the Company and Master Investment
Properties, LLC, which is owned by the Shareholders, (A) no
Shareholder or any Related Person of Shareholders or of the
Company has, or since January 1, 1995 has had, any interest in
any property (whether real, personal, or mixed and whether
tangible or intangible), used in or pertaining to the
Company's business; (B) no Shareholder or any Related Person
of Shareholders or of the Company is, or since January 1, 1995
has owned (of record or as a beneficial owner) an equity
interest or any other financial or profit interest in, a
Person that has (i) had business dealings or a material
financial interest in any transaction with the Company, or
(ii) engaged in competition with the Company with respect to
any line of the products or services of the Company (a
"Competing Business") in any market presently served by the
Company, and (C) except as set forth in Part 3.25 of the
Disclosure Letter, no Shareholder or any Related Person of
Shareholders or of the Company is a party to any Contract
with, or has any claim or right against, the Company.
3.26 Brokers or Finders
Except for the Contract between the Company and Legacy
Capital Fund, Inc., Shareholders and their agents have
incurred no obligation or liability, contingent or otherwise,
for brokerage or finders' fees or agents' commissions or other
similar payment in connection with this Agreement.
4. REPRESENTATIONS AND WARRANTIES OF PURCHASER
4.1 Organization and Good Standing
Purchaser is a corporation duly organized, validly
existing, and in good standing under the laws of the State of
Illinois.
4.2 Authority; No Conflict
(a) This Agreement constitutes the legal, valid, and
binding obligation of Purchaser, enforceable against
Purchaser in accordance with its terms, subject to
bankruptcy laws and laws affecting rights of
creditors generally. Upon the execution and delivery
by Purchaser of the Escrow Agreement and the
Employment Agreements (collectively, the
"Purchaser's Closing Documents"), the Purchaser's
Closing Documents will constitute the legal, valid,
and binding obligations of Purchaser, enforceable
against Purchaser in accordance with their
respective terms, subject to bankruptcy laws and
laws affecting rights of creditors generally.
Purchaser has the absolute and unrestricted right,
power, and authority to execute and deliver this
Agreement and the Purchaser's Closing Documents and
to perform its obligations under this Agreement and
the Purchaser's Closing Documents.
(b) Except as set forth in Schedule 4.2, neither the
execution and delivery of this Agreement by
Purchaser nor the consummation or performance of any
of the Contemplated Transactions by Purchaser will
give any Person the right to prevent, delay, or
otherwise interfere with any of the Contemplated
Transactions pursuant to:
(I) any provision of Purchaser's Organizational
Documents;
(ii) any resolution adopted by the board of
directors or the shareholders of Purchaser;
(iii) any Legal Requirement or Order to which
Purchaser may be subject; or
(iv) any Contract to which Purchaser is a party
or by which Purchaser may be bound.
Except as set forth in Schedule 4.2, Purchaser is not and
will not be required to obtain any Consent from any Person in
connection with the execution and delivery of this Agreement
or the consummation or performance of any of the Contemplated
Transactions.
4.3 Investment Intent
Purchaser is acquiring the Shares for investment for its
own account and not with a view to, or for the sale in
connection with, any distribution within the meaning of
Section 2(11) of the Securities Act. Purchaser acknowledges
that the Shares have not been registered under the Securities
Act or any state securities law and is fully informed about
the applicable restrictions upon the resale of the Shares
under the Securities Act and applicable state securities laws,
and including Rule 144 promulgated under the Securities Act,
and Louisiana Revised Statutes Section 51:709(4). Purchaser
is capable of bearing the financial risks of the investment
and the Shares.
4.4 Certain Proceedings
There is no pending Proceeding that has been commenced
against Purchaser and that challenges, or may have the effect
of preventing, delaying, making illegal, or otherwise
interfering with, any of the Contemplated Transactions. To
Purchaser's Knowledge, no such Proceeding has been Threatened.
4.5 Brokers or Finders
Purchaser and its officers and agents have incurred no
obligation or liability, contingent or otherwise, for
brokerage or finders' fees or agents' commissions or other
similar payment in connection with this Agreement.
4.6 No Approvals
No permit, consent, approval or authorization of, or
declaration to or filing with, any governmental authority is
required in connection with the execution, delivery and
performance by Purchaser of this Agreement or the other
agreements contemplated hereby, or the consummation by
Purchaser of any other transactions contemplated hereby or
thereby, except as has been obtained or except as expressly
contemplated herein or in the schedules or exhibits hereto.
4.7 Securities Registration Laws.
To the best of Purchaser's knowledge, the purchase of the
Shares to be acquired pursuant hereto does not violate any
federal securities laws or applicable state securities laws.
Purchaser acknowledges and agrees that the purchase of the
Shares pursuant to this Agreement on the Closing Date
constitutes an "isolated nonissuer transaction" or an
"isolated transaction" as those terms are used in Section 4(Q)
of the Illinois Securities Law of 1953, as amended, and that
such purchase does not involve the issuer of the Shares or an
underwriter of the Shares as contemplated by Louisiana Revised
Statutes Section 51:709(3)(a).
4.8 Price of Shares.
Purchaser acknowledges that the purchase price of the
Shares has been determined by negotiation between the
Purchaser and the Shareholders.
4.9 Projections.
Purchaser acknowledges that to the extent any projections
of the financial results or business operations of the Company
have been made to Purchaser, that such projections were merely
good faith forecasts of anticipated results based on certain
assumptions and are not guarantees of actual results of the
Company. The actual results of the Company may vary
materially from the assumptions and any projections which may
have been made.
5. COVENANTS OF SHAREHOLDERS PRIOR TO CLOSING DATE
5.1 Access and Investigation
Between the date of this Agreement and the Closing Date,
Shareholders will, and will cause the Company and its
Representatives to, (a) afford Purchaser and its
Representatives and prospective lenders and their
Representatives (collectively, "Purchaser's Advisors") full
and free access to the Company's personnel, properties
(including subsurface testing), contracts, books and records,
and other documents and data, (b) furnish Purchaser and
Purchaser's Advisors with copies of all such contracts, books
and records, and other existing documents and data as
Purchaser may reasonably request, and (c) furnish Purchaser
and Purchaser's Advisors with such additional financial,
operating, and other data and information as Purchaser may
reasonably request.
5.2 Operation of the Business of the Company
Between the date of this Agreement and the Closing Date,
Shareholders will, and will cause the Company to:
(a) conduct the business of the Company only in the
Ordinary Course of Business;
(b) use their Best Efforts to preserve intact the
current business organization of the Company, keep
available the services of the current officers,
employees, and agents of the Company, and maintain
the relations and good will with suppliers,
customers, landlords, creditors, employees, agents,
and others having business relationships with the
Company;
(c) confer with Purchaser concerning operational matters
of a material nature; and
(d) otherwise report periodically to Purchaser
concerning the status of the business, operations,
and finances of the Company.
(e) Qualify to do business as a foreign corporation and
be in good standing under the laws of each state or
other jurisdiction in which such qualification is
required.
5.3 Negative Covenant
Except as otherwise expressly permitted by this
Agreement! between the date of this Agreement and the Closing
Date, Shareholders will not, and will cause the Company not
to, without the prior consent of Purchaser, take any
affirmative action, or fail to take any reasonable action
within their or its control, as a result of which any of the
changes or events listed in Section 3.16 is likely to occur.
5.4 Required Approvals
As promptly as practicable after the date of this
Agreement, Shareholders will, and will cause the Company to,
make all filings required by Legal Requirements to be made by
them in order to consummate the Contemplated Transactions
(including all filings under the HSR Act). Between the date
of this Agreement and the Closing Date, Shareholders will, and
will cause the Company to, (a) cooperate with Purchaser with
respect to all filings that Purchaser elects to make or is
required by Legal Requirements to make in connection with the
Contemplated Transactions, and (b) cooperate with Purchaser in
obtaining all consents identified in Schedule 4.2 (including
taking all actions requested by Purchaser to cause early
termination of any applicable waiting period under the HSR
Act).
5.5 Notification
Between the date of this Agreement and the Closing Date,
each Shareholder will promptly notify Purchaser in writing if
such Shareholder or the Company becomes aware of any fact or
condition that causes or constitutes a Breach of any of
Shareholders' representations and warranties as of the date of
this Agreement, or if such Shareholder or the Company becomes
aware of the occurrence after the date of this Agreement of
any fact or condition that would (except as expressly
contemplated by this Agreement) cause or constitute a Breach
of any such representation or warranty had such representation
or warranty been made as of the time of occurrence or
discovery of such fact or condition. Should any such fact or
condition require any change in the Disclosure Letter if the
Disclosure Letter were dated the date of the occurrence or
discovery of any such fact or condition, Shareholders will
promptly deliver to Purchaser a supplement to the Disclosure
Letter specifying such change. During the same period, each
Shareholder will promptly notify Purchaser of the occurrence
of any Breach of any covenant of Shareholders in this Section
5 or of the occurrence of any event that may make the
satisfaction of the conditions in Section 7 impossible or
unlikely.
5.6 Payment of Indebtedness by Related Persons
Except as expressly provided in this Agreement,
Shareholders will cause all indebtedness owed to the Company
by any Shareholder or any Related Person of any Shareholder to
be paid in full prior to Closing.
5.7 No Negotiation
Until such time, if any, as this Agreement is terminated
pursuant to Section 9, Shareholders will not, and will cause
the Company and each of their Representatives not to, directly
or indirectly solicit, initiate, or encourage any inquiries or
proposals from, discuss or negotiate with, provide any non-
public information to, or consider the merits of any
unsolicited inquiries or proposals from, any Person (other
than Purchaser) relating to any transaction involving the sale
of the business or assets (other than in the Ordinary Course
of Business) of the Company, or any of the capital stock of
the Company, or any merger, consolidation, business
combination, or similar transaction involving the Company.
5.8 Best Efforts
Between the date of this Agreement and the Closing Date,
Shareholders and the Company will use their Best Efforts to
cause the conditions in Sections 7 and 8 to be satisfied.
6. COVENANTS OF PURCHASER PRIOR TO CLOSING DATE
6.1 Approvals of Governmental Bodies
As promptly as practicable after the date of this
Agreement, Purchaser will, and will cause each of its Related
Persons to, make all filings required by Legal Requirements to
be made by them to consummate the Contemplated Transactions
(including all filings under the HSR Act). Between the date
of this Agreement and the Closing Date, Purchaser will, and
will cause each Related Person to, (i) cooperate with
Shareholders with respect to all filings that Shareholders are
required by Legal Requirements to make in connection with the
Contemplated Transactions, and (ii) cooperate with
Shareholders in obtaining all consents identified in Part 3.2
of the Disclosure Letter; provided that this Agreement will
not require Purchaser to dispose of or make any change in any
portion of its business or to incur any other burden to obtain
a Governmental Authorization.
6.2 Best Efforts
Except as set forth in the proviso to Section 6.1,
between the date of this Agreement and the Closing Date,
Purchaser will use its Best Efforts to cause the conditions in
Sections 7 and 8 to be satisfied.
7. CONDITIONS PRECEDENT TO PURCHASER'S OBLIGATION TO CLOSE
Purchaser's obligation to purchase the Shares and to take
the other actions required to be taken by Purchaser at the
Closing is subject to the satisfaction, at or prior to the
Closing, of each of the following conditions (any of which may
be waived by Purchaser, in whole or in part):
7.1 Accuracy of Representations
All of the Company's and Shareholders' representations
and warranties in this Agreement (considered collectively),
and each of these representations and warranties (considered
individually), must have been accurate in all respects as of
the date of this Agreement, and must be accurate in all
material respects as of the Closing Date as if made on the
Closing Date.
7.2 Shareholders' Performance
All of the covenants and obligations that Shareholders
are required to perform or to comply with pursuant to this
Agreement at or prior to the Closing (considered
collectively), and each of these covenants and obligations
(considered individually), must have been duly performed and
complied with in all material respects.
7.3 Consents
Each of the Consents identified in Part 3.2 of the Disclosure
Letter, and each Consent identified in Schedule 4.2, must
have been obtained and must be in full force and effect.
7.4 Additional Documents
Each of the following documents must have been delivered to
Purchaser:
(a) an opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇, L.L.P., as counsel to
Shareholders, dated the Closing Date, in the form of
Exhibit 7.4(a);
(b) estoppel certificates executed on behalf of each
landlord and other person who is party to a Meterial
Contract whose consent to the Contemplated
Transactions is required, dated as of a date not
more than 30 days prior to the Closing Date, each in
the form of Exhibit 7.4(b); and
(c) such other documents as Purchaser may reasonably
request for the purpose of (i) enabling its counsel
to provide the opinion referred to in Section
8.4(a), (ii) evidencing the accuracy of any of
Shareholders'' representations and warranties, (iii)
evidencing the performance by any Shareholder of, or
the compliance by any Shareholder with, any covenant
or obligation required to be performed or complied
with by such Shareholder, (iv) evidencing the
satisfaction of any condition referred to in this
Section 7, or (v) otherwise facilitating the
consummation or performance of any of the
Contemplated Transactions.
7.5 No Proceedings
Since the date of this Agreement, there must not have
been commenced or Threatened against Purchaser, or against any
Person affiliated with Purchaser, any Proceeding (a) involving
any challenge to, or seeking damages or other relief in
connection with, any of the Contemplated Transactions, or (b)
that may have the effect of preventing, delaying, making
illegal, or otherwise interfering with any of the Contemplated
Transactions.
7.6 No Claim Regarding Stock Ownership or Sale Proceeds
There must not have been made or Threatened by any Person
any claim asserting that such Person (a) is the holder or the
beneficial owner of, or has the right to acquire or to obtain
beneficial ownership of, any stock of, or any other voting,
equity, or ownership interest in, any stock of, or any other
voting, equity, or ownership interest in, the Company, or (b)
is entitled to all or any portion of the Purchase Price
payable for the Shares.
7.7 No Prohibition
Neither the consummation nor the performance of any of
the Contemplated Transactions will, directly or indirectly
(with or without notice or lapse of time), materially
contravene, or conflict with, or result in a material
violation of, or cause Purchaser or any Person affiliated with
Purchaser to suffer any material adverse consequence under,
(a) any applicable Legal Requirement or Order, or (b) any
Legal Requirement or Order that has been published,
introduced, or otherwise proposed by or before any
Governmental Body.
7.8 Board Approval
This Agreement and the Contemplated Transactions must
have been approved by the Boards of Directors of the Company,
the Purchaser and Purchaser's parent, as appropriate.
7.9 Due Diligence Completed
Purchaser shall have completed, to its reasonable
satisfaction, its due diligence investigation of the Company.
8. CONDITIONS PRECEDENT TO SHAREHOLDERS' OBLIGATION TO CLOSE
Shareholders' obligation to sell the Shares and to take
the other actions required to be taken by Shareholders at the
Closing is subject to the satisfaction, at or prior to the
Closing, of each of the following conditions (any of which may
be waived by Shareholders, in whole or in part):
8.1 Accuracy of Representations
All of Purchaser's representations and warranties in this
Agreement (considered collectively), and each of these
representations and warranties (considered individually), must
have been accurate in all material respects as of the date of
this Agreement and must be accurate in all material respects
as of the Closing Date as if made on the Closing Date.
8.2 Purchaser's Performance
(a) All of the covenants and obligations that Purchaser
is required to perform or to comply with pursuant to
this Agreement at or prior to the Closing
(considered collectively), and each of these
covenants and obligations (considered individually),
must have been performed and complied with in all
material respects.
(b) Purchaser must have delivered each of the documents
required to be delivered by Purchaser pursuant to
Section 2.4 and must have made the cash payments
required to be made by Purchaser pursuant to
Sections 2.4(b)(i) and 2.4(b)(ii).
8.3 Consents
Each of the Consents identified in Part 3.2 of the
Disclosure Letter must have been obtained and must be in full
force and effect.
8.4 Additional Documents
Purchaser must have caused the following documents to be
delivered to Shareholders:
(a) an opinion of ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, as general counsel
for Purchaser,
dated the Closing Date, in the form of Exhibit
8.4(a); and
(b) such other documents as Shareholders may reasonably
request for the purpose of (i) enabling their
counsel to provide the opinion referred to in
Section 7.4(a), (ii) evidencing the accuracy of any
representation or warranty of Purchaser, (iii)
evidencing the performance by Purchaser of, or the
compliance by Purchaser with, any covenant or
obligation required to be performed or complied with
by Purchaser, (iv) evidencing the satisfaction of
any condition referred to in this Section 8, or (v)
otherwise facilitating the consummation of any of
the Contemplated Transactions.
8.5 No Injunction
There must not be in effect any Legal Requirement or any
injunction or other Order that (a) prohibits the sale of the
Shares by Shareholders to Purchaser, and (b) has been adopted
or issued, or has otherwise become effective, since the date
of this Agreement.
8.6 Board Approval
This Agreement and the Contemplated Transactions must
have been approved by the Boards of Directors of the Company,
the Purchaser and Purchaser's parent, as appropriate.
8.7 Amendment of Lease
The Lease Agreement between the Company and Master
Investment Properties must have been amended to provide, among
other things, that the term will be reduced to a 10 year term,
and the base annual rental will be $480,000 for the first 5
years, and $504,000 for the 6th through 10th years, and that
the Company's guarantees of the certain loan facilities made
with Hibernia National Bank, and the cross-default and cross-
collateralization agreements in connection therewith, be
cancelled.
9. TERMINATION
9.1 Termination Events
This Agreement may, by notice given prior to or at the
Closing, be terminated:
(a) by either Purchaser or Shareholders if a material
Breach of any provision of this Agreement has been
committed by the other party and such Breach has not
been waived;
(b) (i) by Purchaser if any of the conditions
in Section 7, or in Section 8.7 has not been
satisfied as of the Closing Date or if
satisfaction of such a condition is or becomes
impossible (other than through the failure of
Purchaser to comply with its obligations under
this Agreement) and Purchaser has not waived
such condition on or before the Closing Date;
or
(ii) by Shareholders, if any of the conditions
in Section 8 has not been satisfied of the
Closing Date or if satisfaction of such a
condition is or becomes impossible (other than
through the failure of Shareholders to comply
with their obligations under this Agreement)
and Shareholders have not waived such condition
on or before the Closing Date;
(c) by mutual consent of Purchaser and Shareholders; or
(d) by either Purchaser or Shareholders if the Closing
has not occurred (other than through the failure of
any party seeking to terminate this Agreement to
comply fully with its obligations under this
Agreement) on or before November 15, 1996, or such
later date as the parties may agree upon.
9.2 Effect of Termination
Each party's right of termination under Section 9.1 is in
addition to any other rights it may have under this Agreement
or otherwise, and the exercise of a right of termination will
not be an election of remedies. If this Agreement is
terminated pursuant to Section 9.1, all further obligations of
the parties under this Agreement will terminate, except that
the obligations in Sections 11.1 and 11.3 will survive;
provided, however, that if this Agreement is terminated by a
party because of the Breach of the Agreement by the other
party or because one or more of the conditions to the
terminating party's obligations under this Agreement is not
satisfied as a result of the other party's failure to comply
with its obligations under this Agreement, the terminating
party's right to pursue all legal remedies will survive such
termination unimpaired.
9.3 Liquidated Damages
Notwithstanding any other provisions of this Agreement,
if Purchaser fails or refuses to close, or if the Board of
Directors of Purchaser or Purchaser's parent refuses to
approve the transaction, for any reason other than (a) the
Breach of the Agreement by Shareholders, or (b) because one or
more of the conditions to Purchaser's obligations under this
Agreement is not satisfied, or (c) because Purchaser is unable
to procure the financing needed to consummate the Contemplated
Transactions, Purchaser will pay to Shareholders the sum of
$500,000.00 as the sole and agreed damages to Shareholders.
If Purchaser fails or refuses to close because Purchaser
is unable to procure the financing needed to consummate the
Contemplated Transactions, Purchaser will pay to Shareholders
the sum of $250,000.00 as the sole and agreed damages to
Shareholders.
10. INDEMNIFICATION; REMEDIES
10.1 Survival; Right to Indemnification Not Affected By
Knowledge
All representations, warranties, covenants, and
obligations in this Agreement, the Disclosure Letter, the
supplements to the Disclosure Letter, the certificate
delivered pursuant to Section 2.4(a)(v), and any other
certificate or document delivered pursuant to this Agreement
will survive the Closing for a period of one year. The right
to indemnification, payment of Damages or other remedy based
on such representations, warranties, covenants, and
obligations will not be affected by any investigation
conducted at any time, whether before or after the execution
and delivery of this Agreement or the Closing Date, with
respect to the accuracy or inaccuracy of or compliance with,
any such representation, warranty, covenant, or obligation.
Notwithstanding the foregoing, the Company's representations
shall terminate at the Closing and the Shareholders release
the Company from all claims arising out of the Transaction
based on indemnification or contribution.
10.2 Indemnification and Payment of Damages By
Shareholders
Shareholders, jointly and severally, will indemnify and
hold harmless Purchaser, the Company, and their respective
Representatives, Shareholders, controlling persons, and
affiliates (collectively, the "Indemnified Persons") for, and
will pay to the Indemnified Persons the amount of, any loss,
liability, claim, damage (including incidental and
consequential damages), expense (including costs of
investigation and defense and reasonable attorneys' fees) or
diminution of value, whether or not involving a third-party
claim (collectively, "Damages"), to the extent such Damages
exceed any then currently existing insurance coverage,
arising, directly or indirectly, from or in connection with:
(a) any Breach of any representation or warranty made by
Shareholders in this Agreement (without giving
effect to any supplement to the Disclosure Letter),
the Disclosure Letter, the supplements to the
Disclosure Letter, or any other certificate or
document delivered by Shareholders pursuant to this
Agreement;
(b) any Breach of any representation or warranty made by
Shareholders in this Agreement as if such
representation or warranty were made on and as of
the Closing Date without giving effect to any
supplement to the Disclosure Letter, other than any
such Breach that is disclosed in a supplement to the
Disclosure Letter and is expressly identified in the
certificate delivered pursuant to Section 2.4(a)(v)
as having caused the condition specified in Section
7.1 not to be satisfied;
(c) any Breach by any Shareholder of any covenant or
obligation of such Shareholder in this Agreement;
(d) any product shipped or manufactured by, or any
services provided by, the Company prior to the
Closing Date; or
(e) any claim by any Person for brokerage or finder's
fees or commissions or similar payments based upon
any agreement or understanding alleged to have been
made by any such Person with any Shareholder or the
Company (or any Person acting on their behalf) in
connection with any of the Contemplated
Transactions.
The remedies provided in this Section 10.2 will not be
exclusive of or limit any other remedies that may be available
to Purchaser or the other Indemnified Persons. Notwithstanding
the foregoing, the indemnification obligations of each
Shareholder individually shall not exceed the amounts
specified in Section 10.6.
10.3 Indemnification and Payment of Damages By
Shareholders - Environmental Matters
In addition to the provisions of Section 10.2,
Shareholders, jointly and severally, will indemnify and hold
harmless Purchaser, the Company, and the other Indemnified
Persons for, and will pay to Purchaser, the Company, and the
other Indemnified Persons the amount of, any Damages
(including costs of cleanup, containment, or other
remediation) arising, directly or indirectly, from or in
connection with:
(a) any Environmental, Health, and Safety Liabilities
arising out of or relating to: (i) (A) the
ownership, operation, or condition at any time on or
prior to the Closing Date of the Facilities or any
other properties and assets (whether real, personal,
or mixed and whether tangible or intangible) in
which Shareholders or the Company has or had an
interest, or (B) any Hazardous Materials or other
contaminants that were present on the Facilities or
such other properties and assets at any time on or
prior to the Closing Date; or (ii) (A) any Hazardous
Materials or other contaminants, wherever located,
that were, or were allegedly, generated,
transported, stored, treated, Released, or otherwise
handled by Shareholders or the Company or by any
other Person for whose conduct they are or may be
held responsible at any time on or prior to the
Closing Date, or (B) any Hazardous Activities that
were, or were allegedly, conducted by Shareholders
or the Company or by any other Person for whose
conduct they are or may be held responsible; or
(b) any bodily injury (including illness, disability,
and death, and regardless of when any such bodily
injury occurred, was incurred, or manifested
itself), personal injury, property damage (including
trespass, nuisance, wrongful eviction, and
deprivation of the use of real property), or other
damage of or to any Person, including any employee
or former employee of Shareholders or the Company or
any other Person for whose conduct they are or may
be held responsible, in any way arising from or
allegedly arising from any Hazardous Activity
conducted or allegedly conducted with respect to the
Facilities or the operation of the Company prior to
the Closing Date, or from Hazardous Material that
was (i) present or suspected to be present on or
before the Closing Date on or at the Facilities (or
present or suspected to be present on any other
property, if such Hazardous Material emanated or
allegedly emanated from any of the Facilities and
was present or suspected to be present on any of the
Facilities on or prior to the Closing Date) or (ii)
Released or allegedly Released by Shareholders or
the Company or any other Person for whose conduct
they are or may be held responsible, at any time on
or prior to the Closing Date.
Purchaser will be entitled to control any Cleanup, any
related Proceeding, and, except as provided in the following
sentence, any other Proceeding with respect to which indemnity
may be sought under this Section 10.3. The procedure described
in Section 10.9 will apply to any claim solely for monetary
damages relating to a matter covered by this Section 10.3.
10.4 Indemnification and Payment of Damages By Purchaser
Purchaser will indemnify and hold harmless Shareholders,
and will pay to Shareholders the amount of any Damages
arising, directly or indirectly, from or in connection with
(a) any Breach of any representation or warranty made by
Purchaser in this Agreement or in any certificate delivered by
Purchaser pursuant to this Agreement, (b) any Breach by
Purchaser of any covenant or obligation of Purchaser in this
Agreement, or (c) any claim by any Person for brokerage or
finder's fees or commissions or similar payments based upon
any agreement or understanding alleged to have been made by
such Person with Purchaser (or any Person acting on its
behalf) in connection with any of the Contemplated
Transactions.
10.5 Time Limitations
If the Closing occurs, Shareholders will have no
liability (for indemnification or otherwise) with respect to
any representation or warranty, or covenant or obligation to
be performed and complied with prior to the Closing Date,
other than those in Sections 3.3 and 3.11, unless on or before
the first anniversary of the Closing Purchaser notifies
Shareholders of a claim specifying the factual basis of that
claim in reasonable detail to the extent then known by
Purchaser; a claim with respect to Section 3.3 or 3.11, may be
made at any time. If the Closing occurs, Purchaser will have
no liability (for indemnification or otherwise) with respect
to any representation or warranty, or covenant or obligation
to be performed and complied with prior to the Closing Date,
unless on or before the first anniversary of the Closing
Shareholders notify Purchaser of a claim specifying the
factual basis of that claim in reasonable detail to the extent
then known by Shareholders.
10.6 Limitations On Amount - Shareholders
Shareholders will have no liability (for indemnification
or otherwise) with respect to the matters described in Section
10.2 or 10.3 until the total of all Damages with respect to
such matters exceeds 2% of the Purchase Price (as adjusted by
the Adjustment Amount), and then only for the amount by which
such Damages exceed said 2%, but not to exceed, for each
Shareholder, the amount of consideration received by such
Shareholder, less a proportionate share of the 2% threshold..
However, this Section 10.6 will not apply to any Breach of any
of Shareholders' representations and warranties of which any
Shareholder had actual knowledge at the time such
representation and warranty is made or any intentional Breach
by any Shareholder of any covenant or obligation, and
Shareholders will be individually and not jointly and
severally liable for all Damages with respect to such
Breaches.
10.7 Limitations on Amount - Purchaser
Purchaser will have no liability (for indemnification or
otherwise) with respect to the matters described in clause (a)
or (b) of Section 10.4 until the total of all Damages with
respect to such matters exceeds $100,000.00, and then only for
the amount by which such Damages exceed $100,000.00.
However, this Section 10.7 will not apply to any Breach of any
of Purchaser's representations and warranties of which
Purchaser had actual knowledge at the time such representation
and warranty is made or any intentional Breach by Purchaser of
any covenant or obligation, and Purchaser will be liable for
all Damages with respect to such Breaches.
10.8 Procedure for Indemnification - Third Party Claims
(a) Promptly after receipt by an indemnified party under
Section 10.2, 10.4, or (to the extent provided in
the last sentence of Section 10.3) Section 10.3 of
notice of the commencement of any Proceeding against
it, such indemnified party will, if a claim is to be
made against an indemnifying party under such
Section, give notice to the indemnifying party of
the commencement of such claim, but the failure to
notify the indemnifying party will not relieve the
indemnifying party of any liability that it may have
to any indemnified party, except to the extent that
the indemnifying party demonstrates that the defense
of such action is prejudiced by the indemnifying
party's failure to give such notice.
(b) If any Proceeding referred to in Section lO.8(a) is
brought against an indemnified party and it gives
notice to the indemnifying party of the commencement
of such Proceeding, the indemnifying party will,
unless the claim involves Taxes, be entitled to
participate in such Proceeding and, to the extent
that it wishes (unless (i) the indemnifying party is
also a party to such Proceeding and the indemnified
party determines in good faith that joint
representation would be inappropriate, or (ii) the
indemnifying party fails to provide reasonable
assurance to the indemnified party of its financial
capacity to defend such Proceeding and provide
indemnification with respect to such Proceeding), to
assume the defense of such Proceeding with counsel
satisfactory to the indemnified party and, after
notice from the indemnifying party to the
indemnified party of its election to assume the
defense of such Proceeding, the indemnifying party
will not, as long as it diligently conducts such
defense, be liable to the indemnified party under
this Section 10 for any fees of other counsel or any
other expenses with respect to the defense of such
Proceeding, in each case subsequently incurred by
the indemnified party in connection with the defense
of such Proceeding, other than reasonable costs of
investigation. If the indemnifying party assumes the
defense of a Proceeding, (i) it will be conclusively
established for purposes of this Agreement that the
claims made in that Proceeding are within the scope
of and subject to indemnification; (ii) no
compromise or settlement of such claims may be
effected by the indemnifying party without the
indemnified party's consent unless (A) there is no
finding or admission of any violation of Legal
Requirements or any violation of the rights of any
Person and no effect on any other claims that may be
made against the indemnified party, and (B) the sole
relief provided is monetary damages that are paid in
full by the indemnifying party; and (iii) the
indemnified party will have no liability with
respect to any compromise or settlement of such
claims effected without its consent. If notice is
given to an indemnifying party of the commencement
of any Proceeding and the indemnifying party does
not, within ten days after the indemnified party's
notice is given, give notice to the indemnified
party of its election to assume the defense of such
Proceeding, the indemnifying party will be bound by
any determination made in such Proceeding or any
compromise or settlement effected by the indemnified
party.
(c) Notwithstanding the foregoing, if an indemnified
party determines in good faith that there is a
reasonable probability that a Proceeding may
adversely affect it or its affiliates other than as
a result of monetary damages for which it would be
entitled to indemnification under this Agreement,
the indemnified party may, by notice to the
indemnifying party, assume the exclusive right to
defend, compromise, or settle such Proceeding, but
the indemnifying party will not be bound by any
determination of a Proceeding so defended or any
compromise or settlement effected without its
consent (which may not be unreasonably withheld).
(d) Shareholders hereby consent to the non-exclusive
jurisdiction of any court in which a Proceeding is
brought against any Indemnified Person for purposes
of any claim that an Indemnified Person may have
under this Agreement with respect to such Proceeding
or the matters alleged therein, and agree that
process may be served on Shareholders with respect
to such a claim anywhere in the world.
10.10 Procedure for Indemnification - Other Claims
A claim for indemnification for any matter not involving
a third-party claim may be asserted by notice to the party
from whom indemnification is sought.
11. GENERAL PROVISIONS
11. 1 Expenses
Except as otherwise expressly provided in this Agreement,
each party to this Agreement will bear its respective expenses
incurred in connection with the preparation, execution, and
performance of this Agreement and the Contemplated
Transactions, including all fees and expenses of agents,
representatives, counsel, and accountants. Purchaser will pay
amounts payable to Legacy Capital in connection with this
Agreement and the Contemplated Transactions up to but not in
excess of $900,000.00. Purchaser will pay the HSR Act filing
fee. Shareholders will cause the Company not to incur any out-
of-pocket expenses in connection with this Agreement. In the
event of termination of this Agreement, the obligation of each
party to pay its own expenses will be subject to any rights of
such party arising from a breach of this Agreement by another
party.
11.2 Public Announcements
Any public announcement or similar publicity with respect
to this Agreement or the Contemplated Transactions will be
issued, if at all, at such time and in such manner as
Purchaser determines. Unless consented to by Purchaser in
advance or required by Legal Requirements, prior to the
Closing Shareholders shall, and shall cause the Company to,
keep this Agreement strictly confidential and may not make any
disclosure of this Agreement to any Person. Shareholders and
Purchaser will consult with each other concerning the means by
which the Company's employees, customers, and suppliers and
others having dealings with the Company will be informed of
the Contemplated Transactions, and Purchaser will have the
right to be present for any such communication.
1 1.3 Confidentiality
Between the date of this Agreement and the Closing Date,
Purchaser and Shareholders will maintain in confidence, and
will cause the directors, officers, employees, agents, and
advisors of Purchaser and the Company to maintain in
confidence, and not use to the detriment of another party or
the Company, any written, oral, or other information obtained
in confidence from another party in connection with this
Agreement or the Contemplated Transactions, unless (a) such
information is already known to such party or to others not
bound by a duty of confidentiality or such information becomes
publicly available through no fault of such party, (b) the use
of such information is necessary or appropriate in making any
filing or obtaining any consent or approval required for the
consummation of the Contemplated Transactions, or (c) the
furnishing or use of such information is required by, or
necessary or appropriate in connection with, legal
proceedings.
If the Contemplated Transactions are not consummated,
each party will return or destroy as much of such written
information as the other party may reasonably request. Whether
or not the Closing takes place, Shareholders and the Company
waive any cause of action, right, or claim arising out of the
access of Purchaser or its representatives to any trade
secrets or other confidential information of the Company
except for the intentional competitive misuse by Purchaser of
such trade secrets or confidential information.
11.4 Notices
All notices, consents, waivers, and other communications
under this Agreement must be in writing and will be deemed to
have been duly given when (a) delivered by hand (with written
confirmation of receipt), (b) sent by telecopier (with written
confirmation of receipt), provided that a copy is mailed by
registered mail, return receipt requested, or (c) when
received by the addressee, if sent by a nationally recognized
overnight delivery service (receipt requested), in each case
to the appropriate addresses and telecopier numbers set forth
below (or to such other addresses and telecopier numbers as a
party may designate by notice to the other parties):
Shareholders: c/o ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Purchaser: United Stationers Supply Co.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Chairman
Facsimile No.:
with a copy to: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, General Counsel
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
11.5 Alternative Dispute Resolution
1. It is the intention of the parties to make a good
faith effort to resolve, without resort to
litigation, any dispute, controversy or claim
arising out of or relating to this Agreement
("Dispute").
2. Shareholders' and Purchaser's designated
representatives, which shall, in the case of the
Purchaser, be a senior executive, with authority to
resolve the Dispute shall attempt to resolve all
Disputes by negotiation.
Within 20 days of referral of the Dispute to such
representatives, each party's representative shall
prepare and submit to the other party a brief
summary of the Dispute and a statement of the
party's position. Within 20 days of receiving a
party's statement, the receiving party shall submit
a response. Upon receiving the statements and
responses, or upon the expiration of the applicable
time periods, the designated representatives shall
promptly begin discussions in an effort to agree
upon a resolution of the Dispute.
If the designated representatives do not agree upon
a resolution of the Dispute within 60 days of the
referral to them, either party may elect to initiate
mediation of the Dispute in accordance with the
Center for Public Resources Model Procedure for
Mediation of Business Disputes ("CPR Mediation").
If the Dispute has not been resolved pursuant to CPR
Mediation within 60 days of the initiation of such
proceedings, or if the other party will not
participate in such proceedings, the Dispute shall
be resolved by arbitration in a location selected
by the arbitrator in accordance with the Center for
Public Resources Rules for Non-Administered
Arbitration of Business Disputes ("CPR Arbitration")
by a sole arbitrator who shall be selected by both
parties and whose fees and costs shall be paid by
the losing party to the arbitration. The
arbitration shall be governed by the U.S.
Arbitration Act, 9 U.S.C. Sections 1-16, and
judgment on the award, if any, rendered by the
arbitrator may be entered by any court having
jurisdiction thereof.
The procedures specified in this Section are the
sole and exclusive procedures for the resolution of
Disputes; provided, however, that (1) any time
limitation set forth herein may be extended by
mutual written agreement of the parties; (2) any
party may seek a preliminary injunction or other
interim relief if in its judgment such relief is
necessary to prevent irreparable damage, and despite
such action, the parties will continue to
participate in good faith in the procedures outlined
herein; and (3) either party may seek preliminary
and permanent injunctive relief or other interim or
permanent relief if the Dispute involves a
threatened or actual breach of the Confidentiality
Agreement, and despite such action the parties will
continue to participate in good faith in the
procedures outlined herein.
11.6 Further Assurances
The parties agree (a) to furnish upon request to each
other such further information, (b) to execute and deliver to
each other such other documents, and (c) to do such other acts
and things, all as the other party may reasonably request for
the purpose of carrying out the intent of this Agreement and
the documents referred to in this Agreement.
11.7 Waiver
The rights and remedies of the parties to this Agreement
are cumulative and not alternative. Neither the failure nor
any delay by any party in exercising any right, power, or
privilege under this Agreement or the documents referred to in
this Agreement will operate as a waiver of such right, power,
or privilege, and no single or partial exercise of any such
right, power, or privilege will preclude any other or further
exercise of such right, power, or privilege or the exercise of
any other right, power, or privilege. To the maximum extent
permitted by applicable law, (a) no claim or right arising out
of this Agreement or the documents referred to in this
Agreement can be discharged by one party, in whole or in part,
by a waiver or renunciation of the claim or right unless in
writing signed by the other party; (b) no waiver that may be
given by a party will be applicable except in the specific
instance for which it is given; and (c) no notice to or demand
on one party will be deemed to be a waiver of any obligation
of such party or of the right of the party giving such notice
or demand to take further action without notice or demand as
provided in this Agreement or the documents referred to in
this Agreement.
11.8 Entire Agreement and Modification
This Agreement supersedes all prior agreements between
the parties with respect to its subject matter (including the
Letter of Intent between Purchaser and Shareholders dated
September 10, 1996) and constitutes (along with the documents
referred to in this Agreement) a complete and exclusive
statement of the terms of the agreement between the parties
with respect to its subject matter. This Agreement may not be
amended except by a written agreement executed by the party to
be charged with the amendment.
11.9 Waiver of Restrictions
The Company and Shareholders waive any rights they may
have or be entitled to under any restrictions imposed on their
rights to transfer and convey the Shares pursuant to this
Agreement.
11.10 Assignments, Successors, and No Third-Party Rights
No party may assign any of its rights under this
Agreement without the prior consent of the other parties,
which will not be unreasonably withheld, except that Purchaser
may assign any of its rights under this Agreement to any
subsidiary of Purchaser. Subject to the preceding sentence,
this Agreement will apply to, be binding in all respects upon,
and inure to the benefit of the successors and permitted
assigns of the parties. Nothing expressed or referred to in
this Agreement will be construed to give any Person other than
the parties to this Agreement any legal or equitable right,
remedy, or claim under or with respect to this Agreement or
any provision of this Agreement. This Agreement and all of its
provisions and conditions are for the sole and exclusive
benefit of the parties to this Agreement and their successors
and permitted assigns.
11.11 Severability
If any provision of this Agreement is held invalid or
unenforceable by any court of competent jurisdiction, the
other provisions of this Agreement will remain in full force
and effect. Any provision of this Agreement held invalid or
unenforceable only in part or degree will remain in full force
and effect to the extent not held invalid or unenforceable.
11.12 Section Headings, Construction
The headings of Sections in this Agreement are provided
for convenience only and will not affect its construction or
interpretation. All references to "Section" or "Sections"
refer to the corresponding Section or Sections of this
Agreement. All words used in this Agreement will be construed
to be of such gender or number as the circumstances require.
Unless otherwise expressly provided, the word "including" does
not limit the preceding words or terms.
11.13 Time of Essence
With regard to all dates and time periods set forth or
referred to in this Agreement, time is of the essence.
11.14 Governing Law
This Agreement will be governed by the laws of the State
of Illinois without regard to conflicts of laws principles.
11.15 Counterparts
This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original
copy of this Agreement and all of which, when taken together,
will be deemed to constitute one and the same agreement.
11.16 Joinder of Spouses
Each of the Shareholders' spouses joins in this Agreement
for the purpose of consenting to its execution and
implementation in accordance with any community property or
other rights such spouse may have in the Shares or the
proceeds of the sale thereof, but not otherwise.
IN WITNESS WHEREOF, the parties have executed and
delivered this Agreement as of the date first written above.
Purchaser: The Company:
United Stationers Supply Co. ▇▇▇▇▇▇▇ Bros.,Inc.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Vice President, Secretary President
and General Counsel
SPOUSES: Shareholders:
/s/▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
/s/▇▇▇▇▇▇ ▇▇▇▇▇▇▇ /s/▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
/s/▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ /s/▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
/s/▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ /s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
/s/▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ /s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
EXHIBIT 2.4(a)(ii)
RELEASE
This Release is being executed and delivered in
accordance with Section 2.4(a)(ii) of the Stock Purchase
Agreement dated October 1,1996 (the "Agreement") between
United Stationers Supply Co., an Illinois corporation
("Purchaser"), and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, (the "Shareholders") being all
of the shareholders of ▇▇▇▇▇▇▇ Bros., Inc. (the "Company").
Capitalized terms used in this Release without definition have
the respective meanings given to them in the Agreement.
Each Shareholder acknowledges that execution and delivery
of this Release is a condition to Purchaser's obligation to
purchase the outstanding capital stock of the Company pursuant
to the Agreement and that Purchaser is relying on this Release
in consummating such purchase.
Each Shareholder, for good and valuable consideration the
receipt and sufficiency of which is hereby acknowledged and
intending to be legally bound, in order to induce Purchaser to
purchase the outstanding capital stock of the Company pursuant
to the Agreement, hereby agrees as follows:
Each Shareholder, on behalf of himself or herself and
each of his or her Related Persons, hereby releases and
forever discharges the Purchaser and the Company, and each of
their respective individual, joint or mutual, past, present
and future Representatives, affiliates, Stockholders,
controlling persons, parents, subsidiaries, successors and
assigns (individually, a "Releasee" and collectively,
"Releasees") from any and all claims, demands, Proceedings,
causes of action, Orders, obligations, contracts, agreements,
debts and liabilities whatsoever, whether known or unknown,
suspected or unsuspected, both at law and in equity, which
each of the Shareholders or any of their respective Related
Persons now has, have ever had or may hereafter have against
the respective Releasees arising contemporaneously with or
prior to the Closing Date or on account of or arising out of
any matter, cause or event occurring contemporaneously with or
prior to the Closing Date, including, but not limited to, any
rights to indemnification or reimbursement from the Company,
whether pursuant to its Organizational Documents, contract or
otherwise and whether or not relating to claims pending on, or
asserted after, the Closing Date; provided, however, that
nothing contained herein shall operate to release any
obligations of Purchaser arising under the Agreement.
Each Shareholder hereby irrevocably covenants to refrain
from, directly or indirectly, asserting any claim or demand,
or commencing, instituting or causing to be commenced, any
proceeding of any kind against any Releasee, based upon any
matter purported to be released hereby.
Without in any way limiting any of the rights and
remedies otherwise available to any Releasee, each
Shareholder, jointly and severally, shall indemnify and hold
harmless each Releasee from and against all loss, liability,
claim, damage (including incidental and consequential damages)
or expense (including costs of investigation and defense and
reasonable attorney's fees) whether or not involving third
party claims, arising directly or indirectly from or in
connection with (i) the assertion by or on behalf of the
Shareholders or any of their Related Persons of any claim or
other matter purported to be released pursuant to this Release
and (ii) the assertion by any third party of any claim or
demand against any Releasee which claim or demand arises
directly or indirectly from, or in connection with, any
assertion by or on behalf of the Shareholders or any of their
Related Persons against such third party of any claims or
other matters purported to be released pursuant to this
Release.
If any provision of this Release is held invalid or
unenforceable by any court of competent jurisdiction, the
other provisions of this Release will remain in full force and
effect. Any provision of this Release held invalid or
unenforceable only in part or degree will remain in full force
and effect to the extent not held invalid or unenforceable.
This Release may not be changed except in a writing
signed by the person(s) against whose interest such change
shall operate. This Release shall be governed by and construed
under the laws of the State of Illinois without regard to
principles of conflicts of law. All words used in this
Release will be construed to be of such gender or number as
the circumstances require.
IN WITNESS WHEREOF, each of the undersigned have executed
and delivered this Release as of this day of
, 1996.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
EXHIBIT 2.4(a)(iii)
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is made as of
, 1996 by and between ▇▇▇▇▇▇▇ Bros., Inc., a Louisiana
corporation (the "Company") and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ [▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇] ("Executive").
RECITALS
Concurrently with the execution and delivery of this
Agreement, United Stationers Supply Co., an Illinois
corporation (the "Purchaser"), is purchasing from the
Executive and others (the "Shareholders"), all of the issued
and outstanding shares of stock of the Employer, pursuant to a
Stock Purchase Agreement dated October 1, 1996 between the
Executive, the Company, and the Shareholders, and the
Purchaser (the "Stock Purchase Agreement"). The Purchaser and
the Company desire the Executive's continued employment with
the Company, and the Executive wishes to accept such continued
employment, upon the terms and conditions set forth in this
Agreement.
AGREEMENT
In consideration of the mutual promises and agreements
contained in this Agreement, the Company hereby employs
Executive, and Executive accepts employment with the Company
on the terms and conditions contained in this Agreement.
1. Term of Employment. The term of employment
shall be for two years commencing as of the date of this
Agreement and shall continue until __________________, 1998.
2. Position and Duties. During the term of
employment, Executive shall serve as President [Senior Vice
President] of the Company, and, in accordance with the
authority and direction of the board of directors of the
Company (the "Board") shall render such administrative and
other services to the Company as may be required of such
position or as the Board may from time to time direct.
Executive shall be available at all reasonable times for
consultation with the Board on matters relating to the
Company's, or its affiliates' business.
Executive shall devote his best efforts and his full and
exclusive business time and attention (except for reasonable
periods of vacation, illness or other incapacity) to the
business and affairs of the Company and its affiliates.
3. Compensation. During the term of employment,
Executive shall be compensated as follows:
3.1. Base Salary. Executive shall receive a
base salary of no less than $ 200,000 [$185,000] per
year, payable in accordance with the Company's normal
payment schedule for management employees. The base
salary shall be reviewed by the Board annually and may,
in the Board's sole discretion, be increased when deemed
appropriate.
3.2. Bonus. Executive shall be eligible to
participate in any bonus plans approved by the Board and
made generally available to senior management employees
of the Company, and shall be entitled to such bonus
amounts as shall be determined in accordance with such
plans. Specifically, Executive shall be entitled to
participate in an incentive bonus plan during the next
two years which shall entitle him to a maximum annual
bonus of $100,000 based on performance criteria
determined by the Board and agreed to by Executive.
3.3. Benefits. Executive shall be included, to the
extent eligible, in all plans, programs and policies
providing general benefits for the Company's employees or
its senior management employees (as approved by the Board
and in effect from time to time). This paragraph shall
not be construed to require the Company to establish or
maintain any policy, plan or program.
4. Confidential Information.
4.1. Executive acknowledges the Company's exclusive
ownership of all information useful in the Company's business
(including its dealings with suppliers, customers and other
third parties, whether or not a true "trade secret"), which at
the time or times concerned is not generally known to persons
engaged in businesses similar to those conducted by the
Company, and which has been or is from time to time disclosed
to, discovered by, or otherwise known by Executive as a
consequence of his employment by the Company (including
information conceived, discovered or developed by Executive
during his employment with the Company) (collectively,
"Confidential Information"). Confidential Information
includes, but is not limited to the following especially
sensitive types of information:
(i) The identity, purchase and payment patterns
of, and special relations with, the
Company's customers;
(ii) The identity, net prices and credit terms of,
and special relations with, the Company's
suppliers;
(iii) The Company's inventory selection and
management techniques;
(iv) The Company's product development and market
ing plans; and
(v) The Company's finances, except to the extent
publicly disclosed.
4.2. The term "Proprietary Materials" shall mean all
business records, documents, drawings, writings, software,
programs and other tangible things which were or are created
or received by or for the Company in furtherance of its
business, including, by or but not limited to, those which
contain Confidential Information. For example, Proprietary
Materials include, but are not limited to, the following
especially sensitive types of materials: applications
software, the data bases of Confidential Information
maintained in connection with such software, and printouts
generated from such data bases; market studies and strategic
plans; customer, supplier and employee lists; contracts and
correspondence with customers and suppliers; documents
evidencing transactions with customers and supplier; sales
calls reports, appointment books, calendars, expense state
ments and the like, reflecting conversations with any company,
customer or supplier; architectural plans; and purchasing,
sales and policy manuals. Proprietary Materials also include,
but are not limited to, any such things which are created by
Executive or with Executive's assistance and all notes,
memoranda and the like prepared using the Proprietary
Materials and/or Confidential Information.
4.3. While some of the information contained in
Proprietary Materials may have been known to Executive prior
to employment with the Company, or may now or in the future be
in the public domain, Executive acknowledges that the compi
lation of that information contained in the Proprietary
Materials has or will cost the Company a great effort and
expense, and affords persons to whom Proprietary Materials are
disclosed, including Executive, a competitive advantage over
persons who do not know the information or have the
compilation of the Proprietary Materials. Executive further
acknowledges that Confidential Information and Proprietary
Materials include commercially valuable trade secrets and
automatically become the Company's exclusive property when
they are conceived, created or received. Executive shall
report to the Company fully and promptly, orally (or, at the
Company's request, in writing) all discoveries, inventions and
improvements, whether or not patentable, and all other ideas,
developments, processes, techniques, designs and other
information which may be of benefit to the Company, which
Executive conceives, makes or develops during his employment
(whether or not during working hours or with use or assistance
of Company facilities, materials or personnel, and which
either (i) relate to or arise out of any part of the Company's
business in which Executive participates, or (ii) incorporate
or make use of Confidential Information or Proprietary
Materials) (all items referred to in this Section 4.3 being
sometimes collectively referred to herein as the "Intellectual
Property"). All Intellectual property shall be deemed
Confidential Information of the Company, and any writing or
other tangible things describing, referring to, or containing
Intellectual Property shall be deemed the Company's
Proprietary Materials. At the request of the Company, during
or after the term of employment, Executive (or after
Executive's death, Executive's personal representative) shall,
at the expense of the Company, make, execute and deliver all
papers, assignments, conveyances, installments or other
documents, and perform or cause to be performed such other
lawful acts, and give such testimony, as the Company deems
necessary or desirable to protect the Company's ownership
rights and Intellectual Property.
4.4. Confidentiality Duties. Executive shall, except
as may be required by law, during the term of employment, and
thereafter for the longest time permitted by applicable law:
4.4.1. Comply with all of the
Company's instructions (whether oral or written) for
preserving the confidentiality of Confidential
Information and Proprietary Materials.
4.4.2. Use Confidential Information
and Proprietary Materials only at places designated by
the Company, in furtherance of the Company's business,
and pursuant to the Company's directions.
4.4.3. Exercise appropriate care to
advise other employees of the Company (and, as
appropriate, subcontractors) of the sensitive nature of
Confidential Information and Proprietary materials prior
to their disclosure, and to disclose the same only on a
need-to-know basis.
4.4.4. Not copy all or any part of
Proprietary Materials, except as the Company directs.
4.4.5. Not sell, give, loan or
otherwise transfer any copy of all or any part of
Proprietary Materials to any person who is not an
employee of the Company, except as the Company directs.
4.4.6. Not publish, lecture on or
otherwise disclose to any person who is not an employee
of the Company, except as the Company directs, all or any
part of Confidential Information or Proprietary
Materials.
4.4.7. Not use all or any part of
any Confidential Information or Proprietary Materials for
the benefit of any third party without the Company's
written consent.
Upon the termination of Executive's employment for
whatever reason, Executive (or in the event of death,
Executive's personal representative) shall promptly surrender
to the Company the original and all copies of Proprietary
Materials (including all notes, memoranda and the like
concerning or derived therefrom), whether prepared by
Executive or others, which are then in Executive's possession
or control. Records of payments made by the Company to or for
the benefit of Executive, Executive's copy of this Agreement
and other such things, lawfully possessed by Executive which
relate solely to taxes payable by Executive, employee benefits
due to Executive or the terms of Executive's employment with
the Company, shall not be deemed Proprietary Materials for
purposes of this Section 4.
5. Non-competition.
5.1. During Executive's employment, and during the two
year period following his employment), Executive shall not, in
any way, directly or indirectly, manage, operate, control (or
participate in any of the foregoing), accept employment or a
consulting position with or otherwise advise or assist or be
connected with or directly or indirectly own or have any other
interest in or right with respect to (other than through
ownership of not more than 1% of the outstanding shares of a
corporation's stock which is listed on a national securities
exchange) any enterprise (other than for the Company or for
the benefit of the Company) which is a wholesaler of
janitorial or sanitation products having annual sales in
excess of $1,000,000 within any parish in the State of
Louisiana in which the Company has any facilities or
customers, and within any county in any other state where the
Company has a facility or customers.
5.2. Executive recognizes that the foregoing limitations
are reasonable and properly required for the adequate
protection of the business of the Company. If any such
limitations are deemed to be unreasonable by a court having
jurisdiction of the matter and parties, Executive hereby
agrees and submits to the reduction of any such limitations to
such territory or time as to such court shall appear
reasonable.
5.3. Executive agrees that the remedy at law for any
breach of the provisions of Section 4 or this Section 5 shall
be inadequate and that the Company shall be entitled to
injunctive relief in addition to any other remedies it may
have.
6. Termination and Severance.
6.1. Resignation. If Executive resigns, he shall
be entitled to receive only the unpaid portion of his base
salary and accrued vacation attributable to and including the
date of resignation, and reimbursement for reasonable
reimbursable expenses incurred on behalf of the Company prior
to the date of termination.
6.2. By Executive For Good Reason. Executive may
elect to terminate his employment by written notice to the
Company within 60 days after the occurrence of any of the
following events without Executive's consent, any of which
shall be deemed "Good Reason":
(a) the reduction of Executive's base salary;
(b) the exclusion of Executive from, or diminution
in Executive's participation in, any bonus, profit
sharing and other similar incentive compensation or
deferred compensation plans made available to employees
of the Company or to officers or management personnel of
the Company at the level of President [Senior Vice
President] or lower, other than exclusions, changes or
diminutions applicable to all employees or such
management personnel or officers; or
(c) any material reduction in Executive's title or
duties which has the effect of materially reducing
Executive's status within the Company; provided, however,
that any change in the office or officer to whom
Executive reports, or in Executive's duties or title
which does not diminish Executive's status within the
Company, shall not be deemed "Good Reason"; or
(d) any relocation of the Company's headquarters
outside of the New Orleans metropolitan area; or
(e) the material breach by the Company of any of
its covenants or obligations under this Agreement.
If the employment is terminated by Executive for Good
Reason, Executive shall be entitled to receive:
6.2.1. the unpaid portion of his base salary
for the remainder of his term of employment (but not for
more than a 12 month period), payable on the Company's
regular pay schedule; and
6.2.2. reimbursement for reasonable
reimbursable expenses incurred on behalf of the Company
prior to the termination; and
6.2.3. a severance amount equal to his base
salary, plus his bonuses earned from the Company for the
calendar year preceding the year in which notice is given
by Executive to the Company, payable in equal
installments on the Company's regular pay schedule,
commencing within 30 days after receipt by the Company of
written notice from Executive and continuing for 12
months.
6.3. By Company For Cause. The Company may terminate
the employment at any time for Cause (as hereinafter defined).
If Executive is terminated by the Company for Cause, Executive
shall be entitled to receive only the unpaid portion of his
base salary and accrued vacation attributable to all periods
prior to and including the date of his termination, and
reimbursement for reasonable reimbursable expenses incurred on
behalf of the Company prior to the date of his termination.
"Cause" means Executive's (a) conviction of , or plea of
nolo contendere to a felony; (b) theft or embezzlement, or
attempted theft or embezzlement, of money or property or
assets of the Company or any of its affiliates; (c) use of
illegal drugs; (d) material breach of this Agreement; (e)
commission of any act or acts of moral turpitude in violation
of Company policy; (f) gross negligence or willful misconduct
in the performance of his duties; or (g) breach of any
fiduciary duty owed to the Company, including, without
limitation, engaging in directly competitive acts while
employed by the Company.
6.4. By the Company. The Company may terminate
Executive's employment on written notice to Executive at any
time. If Executive's employment is terminated by the Company,
other than for Cause, Executive shall be entitled to receive:
6.4.1. the unpaid portion of his base salary
for the remaining portion of the term of employment (but
not for more than 12 months), payable on the Company's
regular pay schedule; and
6.4.2. accrued vacation pay and
reimbursement for reasonable reimbursable expenses
incurred on behalf of the Company prior to the date of
termination; and
6.4.3. severance pay equal to one year's
base salary.
6.5. By Death or Disability. If Executive's employment
is terminated due to his death or permanent disability,
Executive shall be entitled to severance pay in accordance
with the provisions of 6.4.2 and 6.4.3 above.
7. Miscellaneous.
7.1. All notices hereunder shall be given in
writing and sent to the party for whom such is intended
by hand delivery or United States certified or registered
mail, return receipt requested, postage prepaid, or
overnight courier service, addressed to the party for
whom intended at the following respective addresses:
If to the Company: c/o United Stationers Supply Co.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: President
If to Executive:
or to such other persons and/or at such other addresses
as may be designated by written notice served in
accordance with the provisions hereof. Such notices
shall be deemed to have been served, if hand delivered,
on the day delivered, and if mailed, on the third day
following the date deposited in the mail. Urgent notices
shall be given by Telex or cable to the same addresses
and confirmed by mail as provided above. All notices
sent by Telex or cable shall be deemed to have been
served upon receipt of the Telex or cable, but only if in
fact confirmed by mail promptly after dispatch of the
Telex or cable.
7.2. This Agreement and all rights and benefits
hereunder are personal to Executive and neither this
Agreement nor any right or interest of Executive herein,
or arising hereunder, shall be voluntarily or
involuntarily sold, transferred or assigned by Executive.
Any attempt by Executive to assign, execute, attach,
transfer, pledge, hypothecate or otherwise dispose of any
such benefits or amounts or any rights or interests
contrary to the foregoing provisions, or the levy or
attachment or similar process thereupon, shall be null
and void and of no effect and shall relieve the Company
of all liabilities hereunder. This Agreement and all of
the Company's right and obligations hereunder may be
assigned and/or delegated, as the case may be, without
Executive's consent, to any entity which merges with the
Company or which acquires substantially all of the assets
of the Company and which agrees to be bound hereby. The
enforceability of Executive's rights under the Agreement
shall not be affected by any assignment or merger.
7.3. This Agreement shall be binding upon and inure
to the benefit of the parties and their respective heirs,
personal representatives, successors and permitted
assigns.
7.4. This Agreement constitutes the entire
agreement between the parties and contains all the
agreements between such parties with respect to the
subject matter hereof. This Agreement supersedes all
other agreements, oral or in writing, between the parties
with respect to the subject matter hereof.
7.5. No change or modification of this Agreement
shall be valid unless the same shall be approved by the
Board and in writing and signed by Executive and an
authorized representative of the Company other than
Executive. No waiver of any provisions of this Agreement
shall be valid unless in writing and signed by the person
or party to be charged.
7.6. If any provisions of this Agreement (or
portions thereof) shall, for any reason, be invalid or
unenforceable, such provisions (or portions thereof)
shall be ineffective only to the extent of such
invalidity or unenforceability, and the remaining
provisions or portions shall nevertheless be valid,
enforceable and of full force and effect.
7.7 The Section or paragraph headings or titles
are for convenience only and shall not be deemed a part
of this Agreement.
7.8 This Agreement may be executed in multiple
counterparts, each of which shall be deemed to be an
original and all of which taken together shall constitute
a single instrument.
7.9 If Executive or his estate or designee
prevails in any action to enforce their rights under this
Agreement, they shall be entitled to receive their
attorneys' fees, costs and expenses incurred in enforcing
their rights under this Agreement, as well as interest at
the Prime Rate as publicly announced by The Northern
Trust Company of Chicago from time to time on the amount
of the judgment from the date of demand for payment
hereunder through the date of receipt of the amount of
the judgment.
8. Arbitration. Each of the undersigned hereby agrees
that any controversy or claim arising out of or relating to
this Agreement, or the breach thereof, including but not
limited to any claims of discrimination and wrongful
termination, will be submitted for arbitration in accordance
with the Commercial Arbitration Rules of the American
Arbitration Association, and judgment upon the award rendered
by the Arbitrator(s) may be entered in any court having
jurisdiction thereof.
▇▇▇▇▇▇▇ BROS., INC.,
a Louisiana corporation
ATTEST:_______________________ By:_______________________
Secretary Chairman of the Board and
Chief Executive Officer
_____________________________________
[Executive]
EXHIBIT 2.4(a)(iv)
NONCOMPETITION AGREEMENT
This Noncompetition Agreement (this "Agreement") is made
as of , 1996, by and between United Stationers
Supply Co., an Illinois corporation ("Purchaser"), and
_______________________ residing at
___________________________("Shareholder").
RECITALS
Concurrently with the execution and delivery of this
Agreement, Purchaser is purchasing from Shareholder and other
Shareholders all of the outstanding shares (the "Shares") of
common stock, no par value, of ▇▇▇▇▇▇▇ Bros., Inc. (the
"Company") pursuant to the terms and conditions of a stock
purchase agreement made as of October 1, 1996 (the "Stock
Purchase Agreement"). Section 2.4(a)(iv) of the Stock
Purchase Agreement requires that noncompetition agreements be
executed and delivered by each of the Shareholders as a
condition to the purchase of the Shares by Purchaser.
AGREEMENT
The parties, intending to be legally bound, agree as
follows:
1. DEFINITIONS
Capitalized terms not expressly defined in this Agreement
shall have the meanings ascribed to them in the Stock Purchase
Agreement.
2. ACKNOWLEDGMENTS BY SHAREHOLDER
Shareholder acknowledges that (a) Shareholder has
occupied a position of trust and confidence with the Company
prior to the date hereof and has become familiar with the
following, any and all of which constitute confidential
information of the Company, (collectively the "Confidential
Information"): (i) any and all trade secrets concerning the
business and affairs of the Company, product specifications,
data, know-how, formulae, compositions, processes, designs,
sketches, photographs, graphs, drawings, samples, inventions
and ideas, past, current and planned research and development,
current and planned manufacturing and distribution methods and
processes, customer lists, current and anticipated customer
requirements, price lists, market studies, business plans,
computer software and programs (including object code and
source code), computer software and database technologies,
systems, structures and architectures (and related processes,
formulae, compositions, improvements, devices, know-how,
inventions, discoveries, concepts, ideas, designs, methods and
information of the Company and any other information, however
documented, of the Company that is a trade secret; (ii) any
and all information concerning the business and affairs of the
Company (which includes historical financial statements,
financial projections and budgets, historical and projected
sales, capital spending budgets and plans, the names and
backgrounds of key personnel, personnel training and
techniques and materials), however documented; and (iii) any
and all notes, analysis, compilations, studies, summaries, and
other material prepared by or for the Company containing or
based, in whole or in part, on any information included in the
foregoing, (b) the business of the Company is national in
scope, (c) its products and services are marketed throughout
the United States; (d) the Company compete with other
businesses that are or could be located in any part of the
United States; (e) Purchaser has required that Shareholder
make the covenants set forth in Sections 3 and 4 of this
Agreement as a condition to the Purchaser's purchase of the
Shares owned by Shareholders; (f) the provisions of Sections 3
and 4 of this Agreement are reasonable and necessary to
protect and preserve the Company's business, and (g) the
Company would be irreparably damaged if Shareholder were to
breach the covenants set forth in Sections 3 and 4 of this
Agreement.
3. CONFIDENTIAL INFORMATION
Shareholder acknowledges and agrees that all Confidential
Information known or obtained by Shareholder, whether before
or after the date hereof, is the property of the Company.
Therefore, Shareholder agrees that Shareholder will not, at
any time, disclose to any unauthorized Persons or use for his
own account or for the benefit of any third party any
Confidential Information, whether Shareholder has such
information in Shareholder's memory or embodied in writing or
other physical form, without Purchaser's written consent,
unless and to the extent that the Confidential Information is
or becomes generally known to and available for use by the
public other than as a result of Shareholder's fault or the
fault of any other Person bound by a duty of confidentiality
to Purchaser or the Acquired Company. Shareholder agrees to
deliver to Purchaser at the time of execution of this
Agreement, and at any other time Purchaser may request, all
documents, memoranda, notes, plans, records, reports, and
other documentation, models, components, devices, or computer
software, whether embodied in a disk or in other form (and all
copies of all of the foregoing), relating to the business,
operations, or affairs of the Company and any other
Confidential Information that Shareholder may then possess or
have under Shareholder's control.
4. NONCOMPETITION
As an inducement for Purchaser to enter into the Stock
Purchase Agreement and as additional consideration for the
consideration to be paid to Shareholder under the Stock
Purchase Agreement, Shareholder agrees that:
(a) For a period of two years after the Closing:
(i) Shareholder will not, directly or indirectly,
engage or invest in, own, manage, operate,
finance, control, or participate in the
ownership, management, operation, financing, or
control of, be employed by, associated with, or
in any manner connected with, lend
Shareholder's name or any similar name to, lend
Shareholder's credit to, or render services or
advice to, any business whose products or
activities compete in whole or in part with the
products or activities of the Company, anywhere
within any parish in the State of Louisiana, or
in any county in the United States in which the
Company, at the time of the Closing, has a
branch; provided, however, that Shareholder may
purchase or otherwise acquire up to (but not
more than) one percent of any class of
securities of any enterprise (but without
otherwise participating in the activities of
such enterprise) if such securities are listed
on any national or regional securities exchange
or have been registered under Section 12(g) of
the Securities Exchange Act of 1934.
Shareholder agrees that this covenant is
reasonable with respect to its duration,
geographical area, and scope.
(ii) Shareholder will not, directly or
indirectly, either for himself or any other
Person, (A) induce or attempt to induce any
employee of the Company to leave the employ of
the Company, (B) in any way interfere with the
relationship between the Company and any
employee of the Company, (C) employ, or
otherwise engage as an employee, independent
contractor, or otherwise, any employee of the
Company, or (D) induce or attempt to induce any
customer, supplier, licensee, or business
relation of the Company to cease doing business
with the Company, or in any way interfere with
the relationship between any customer,
supplier, licensee, or business relation of the
Company.
(iii) Shareholder will not, directly or
indirectly, either for himself or any other
Person, solicit the business of any Person
known to Shareholder to be a customer of the
Company, whether or not Shareholder had
personal contact with such Person, with respect
to products or activities which compete in
whole or in part with the products or
activities of the Company;
(b) Shareholder will not, at any time during or
after the two year period, disparage Purchaser or
the Company, or any of their shareholders,
directors, officers, employees, or agents.
5. REMEDIES
If Shareholder breaches the covenants set forth in
Sections 3 or 4 of this Agreement, Purchaser and the Company
will be entitled to the following remedies:
(a) Damages from Shareholder;
(b) To offset against any and all amounts owing to
Shareholder under the Stock Purchase Agreement any
and all amounts which Purchaser or the Company claim
under Subsection 5(a) of this Agreement; and
(c) In addition to its right to damages and any other
rights it may have, to obtain injunctive or other
equitable relief to restrain any breach or
threatened breach or otherwise to specifically
enforce the provisions of Sections 3 and 4 of this
Agreement, it being agreed that money damages alone
would be inadequate to compensate the Purchaser and
the Company and would be an inadequate remedy for
such breach.
(d) The rights and remedies of the parties to this
Agreement are cumulative and not alternative.
6. SUCCESSORS AND ASSIGNS
This Agreement will be binding upon Purchaser, the
Company and Shareholder and will inure to the benefit of
Purchaser and the Company and their affiliates, successors and
assigns and Shareholder and Shareholder's assigns, heirs and
legal representatives.
7. WAIVER
The rights and remedies of the parties to this Agreement
are cumulative and not alternative. Neither the failure nor
any delay by any party in exercising any right, power, or
privilege under this Agreement will operate as a waiver of
such right, power, or privilege, and no single or partial
exercise of any such right, power, or privilege will preclude
any other or further exercise of such right, power, or
privilege or the exercise of any other right, power, or
privilege. To the maximum extent permitted by applicable law,
(a) no claim or right arising out of this Agreement can be
discharged by one party, in whole or in part, by a waiver or
renunciation of the claim or right unless in writing signed by
the other party; (b) no waiver that may be given by a party
will be applicable except in the specific instance for which
it is given; and (c) no notice to or demand on one party will
be deemed to be a waiver of any obligation of such party or of
the right of the party giving such notice or demand to take
further action without notice or demand as provided in this
Agreement.
8. GOVERNING LAW
This Agreement will be governed by the laws of the State
of Illinois without regard to conflicts of laws principles.
9. JURISDICTION; SERVICE OF PROCESS
Any action or proceeding seeking to enforce any provision
of, or based on any right arising out of, this Agreement may
be brought against any of the parties in the courts of the
State of Illinois, County of ▇▇▇▇, or the State of Louisiana,
or, if it has or can acquire jurisdiction, in the appropriate
United States District Court, and each of the parties consents
to the jurisdiction of such courts (and of the appropriate
appellate courts) in any such action or proceeding and waives
any objection to venue laid therein. Process in any action or
proceeding referred to in the preceding sentence may be served
on any party anywhere in the world.
10. SEVERABILITY
Whenever possible each provision and term of this
Agreement will be interpreted in a manner to be effective and
valid, but if any provision or term of this Agreement is held
to be prohibited by or invalid, then such provision or term
will be ineffective only to the extent of such prohibition or
invalidity, without invalidating or affecting in any manner
whatsoever the remainder of such provision or term or the
remaining provisions or terms of this Agreement. If any of
the covenants set forth in Section 4 of this Agreement are
held to be unreasonable, arbitrary, or against public policy,
such covenants will be considered divisible with respect to
scope, time, and geographic area, and in such lesser scope,
time and geographic area, will be effective, binding and
enforceable against Shareholder.
11. COUNTERPARTS
This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original
copy of this Agreement and all of which, when taken together,
will be deemed to constitute one and the same agreement.
12. SECTION HEADINGS, CONSTRUCTION
The headings of Sections in this Agreement are provided
for convenience only and will not affect its construction or
interpretation. All references to "Section" or "Sections"
refer to the corresponding Section or Sections of this
Agreement unless otherwise specified. All words used in this
Agreement will be construed to be of such gender or number as
the circumstances require. Unless otherwise expressly
provided, the word "including" does not limit the preceding
words or terms.
13. NOTICES
All notices, consents, waivers, and other communications
under this Agreement must be in writing and will be deemed to
have been duly given when (a) delivered by hand (with written
confirmation of receipt), (b) sent by facsimile (with written
confirmation of receipt), provided that a copy is mailed by
registered mail, return receipt requested, or (c) when
received by the addressee, if sent by a nationally recognized
overnight delivery service (receipt requested), in each case
to the appropriate addresses and facsimile numbers set forth
below (or to such other addresses and facsimile numbers as a
party may designate by notice to the other parties):
Shareholder: _______________________________
_______________________________
Facsimile No.: ________________
Purchaser: United Stationers Supply Co.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: President
Facsimile No.:___________
14. ENTIRE AGREEMENT
This Agreement and the Stock Purchase Agreement
constitute the entire agreement between the parties with
respect to the subject matter of this Agreement and supersede
all prior written and oral agreements and understandings
between Purchaser and Shareholder with respect to the subject
matter of this Agreement. This Agreement may not be amended
except by a written agreement executed by the party to be
charged with the amendment.
IN WITNESS WHEREOF, the parties have executed and
delivered this Agreement as of the date first above written.
PURCHASER: COMPANY:
United Stationers Supply Co. ▇▇▇▇▇▇▇ Bros., Inc.
By: ________________________ By: ____________________________
Its Its
SHAREHOLDER:
______________________________
[NAME]
EXHIBIT 2.4(c)
ESCROW AGREEMENT
This Escrow Agreement, dated as of [DATE], 1996 (the
"Closing Date"), among United Stationers Supply Co., an
Illinois corporation ("Purchaser"), and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
(the"Shareholders") being all of the shareholders of ▇▇▇▇▇▇▇
Bros., Inc., a Louisiana corporation (the "Company")., and
, a [national banking association [bank organized under the
laws of ], as escrow agent ("Escrow Agent").
This is the Escrow Agreement referred to in the Stock
Purchase Agreement dated October 1, 1996 (the
"Purchase Agreement") among Purchaser and Shareholders.
Capitalized terms used in this agreement without definition
shall have the respective meanings given to them in the
Purchase Agreement.
The parties, intending to be legally bound, hereby agree
as follows:
1. ESTABLISHMENT OF ESCROW
(a) Purchaser is depositing with Escrow Agent an amount
equal to $4,500,000.00 in immediately available funds plus $
, being an amount equal to the estimated Adjustment Amount as
described in the Purchase Agreement. These sums, as
increased by any earnings thereon and as reduced by any
disbursements, amounts withdrawn under Section 5(j), or losses
on investments, are referred to herein as the "Escrow Fund".
Escrow Agent acknowledges receipt thereof.
(b) Escrow Agent hereby agrees to act as escrow agent
and to hold, safeguard and disburse the Escrow Fund pursuant
to the terms and conditions hereof.
2. INVESTMENT OF FUNDS
Except as Purchaser and Shareholders may from time to
time jointly instruct Escrow Agent in writing, the Escrow Fund
shall be invested from time to time, to the extent possible,
in United States Treasury bills having a remaining maturity of
90 days or less and repurchase obligations secured by such
United States Treasury Bills, with any remainder being
deposited and maintained in a money market deposit account
with Escrow Agent, until disbursement of the entire Escrow
Fund. Escrow Agent is authorized to liquidate in accordance
with its customary procedures any portion of the Escrow Fund
consisting of investments to provide for payments required to
be made under this Agreement.
3. CLAIMS
(a) If Purchaser gives a notice to Shareholders and
Escrow Agent stating that the Adjustment Amount has been
determined in accordance with Section 2.6 of the Purchase
Agreement and specifying the dollar amount payable to
Purchaser or Shareholders pursuant to Section 2.6(b) of the
Purchase Agreement as a result of such determination, on the
tenth business day following such notice Escrow Agent shall
pay to Purchaser or Shareholders (in equal shares) the dollar
amount so specified from (and only to the extent of) the
Escrow Fund. Escrow Agent shall not inquire into or consider
whether the Adjustment Amount has been determined in
accordance with the requirements of the Purchase Agreement.
In addition, upon disbursement by the Escrow Agent of the
Adjustment Amount, the Escrow Agent will also disburse in
equal shares to the Shareholders a portion of the remaining
balance of the Escrow Fund to reduce the Escrow Fund to
$3,000,000.00.
(b) From time to time on or before , Purchaser
may give notice (a "Notice") to Shareholders and Escrow Agent
specifying in reasonable detail the nature and dollar amount
of any claim (a "Claim") it may have under Section 10 of the
Purchase Agreement; Purchaser may make more than one claim
with respect to any underlying state of facts. If
Shareholders give notice to Purchaser and Escrow Agent
disputing any Claim (a "Counter Notice") within 30 days
following receipt by Escrow Agent of the Notice regarding such
Claim, such Claim shall be resolved as provided in Section
3(c). If no Counter Notice is received by Escrow Agent
within such 30-day period, then the dollar amount of damages
claimed by Purchaser as set forth in its Notice shall be
deemed established for purposes of this Escrow Agreement and
the Purchase Agreement and, at the end of such 30-day period,
Escrow Agent shall pay to Purchaser the dollar amount claimed
in the Notice from (and only to the extent of) the Escrow
Fund. Escrow Agent shall not inquire into or consider whether
a Claim complies with the requirements of the Purchase
Agreement.
(c) If a Counter Notice is given with respect to a
claim, Escrow Agent shall make payment with respect thereto
only in accordance with (i) joint written instructions of
Purchaser and Shareholders or (ii) a final non-appealable
order of a court of competent jurisdiction. Any court order
shall be accompanied by a legal opinion by counsel for the
presenting party satisfactory to Escrow Agent to the effect
that the order is final and non-appealable. Escrow Agent
shall act on such court order and legal opinion without
further question.
4. TERMINATION OF ESCROW
On , 1997 Escrow Agent shall pay and
distribute the then amount of Escrow Fund to Shareholders in
equal shares, unless (i) any Claims are then pending, in which
case an amount equal to the aggregate dollar amount of such
Claims (as shown in the Notices of such Claims) shall be
retained by Escrow Agent in the Escrow Fund (and the balance
paid to Shareholders in such proportions) or (ii) Purchaser
has given notice to Shareholders and Escrow Agent specifying
in reasonable detail the nature of any other claim it may have
under Section 10 of the Purchase Agreement with respect to
which it is unable to specify the amount of Damages, in which
case their entire Escrow Fund shall be retained by Escrow
Agent, in either case until it receives joint written
instructions of Purchaser and Shareholders or a final non-
appealable order of a court of competent jurisdiction as
contemplated by Section 3(b).
5. DUTIES OF ESCROW AGENT
(a) Escrow Agent shall not be under any duty to give the
Escrow Fund held by it hereunder any greater degree of care
than it gives its own similar property and shall not be
required to invest any funds held hereunder except as directed
in this Agreement. Uninvested funds held hereunder shall not
earn or accrue interest.
(b) Escrow Agent shall not be liable, except for its own
gross negligence or willful misconduct and, except with
respect to claims based upon such gross negligence or willful
misconduct that are successfully asserted against Escrow
Agent, the other parties hereto shall jointly and severally
indemnify and hold harmless Escrow Agent (and any successor
Escrow Agent) from and against any and all losses,
liabilities, claims, actions, damages and expenses, including
reasonable attorneys' fees and disbursements, arising out of
and in connection with this Agreement. Without limiting the
foregoing, Escrow Agent shall in no event be liable in
connection with its investment or reinvestment of any cash
held by it hereunder in good faith, in accordance with the
terms hereof, including, without limitation, any liability for
any delays (not resulting from its gross negligence or willful
misconduct) in the investment or reinvestment of the Escrow
Fund, or any loss of interest incident to any such delays.
(c) Escrow Agent shall be entitled to rely upon any
order, judgment, certif1cation, demand, notice, instrument or
other writing delivered to it hereunder without being required
to determine the authenticity or the correctness of any fact
stated therein or the propriety or validity of the service
thereof. Escrow Agent may act in reliance upon any instrument
or signature believed by it to be genuine and may assume that
the person purporting to give receipt or advice or make any
statement or execute any document in connection with the
provisions hereof has been duly authorized to do so. Escrow
Agent may conclusively presume that the undersigned
representative of any party hereto which is an entity other
than a natural person has full power and authority to instruct
Escrow Agent on behalf of that party unless written notice to
the contrary is delivered to Escrow Agent.
(d) Escrow Agent may act pursuant to the advice of
counsel with respect to any matter relating to this Agreement
and shall not be liable for any action taken or omitted by it
in good faith in accordance with such advice.
(e) Escrow Agent does not have any interest in the
Escrow Fund deposited hereunder but is serving as escrow
holder only and having only possession thereof. Any payments
of income from this Escrow Fund shall be subject to
withholding regulations then in force with respect to United
States taxes. The parties hereto will provide Escrow Agent
with appropriate Internal Revenue Service Forms W-9 for tax
identification number certification, or non-resident alien
certif1cations. This Section 5(e) and Section 5(b) shall
survive notwithstanding any termination of this Agreement or
the resignation of Escrow Agent.
(f) Escrow Agent makes no representation as to the
validity, value, genuineness or the collectability of any
security or other document or instrument held by or delivered
to it.
(g) Escrow Agent shall not be called upon to advise any
party as to the wisdom in selling or retaining or taking or
refraining from any action with respect to any securities or
other property deposited hereunder.
(h) Escrow Agent (and any successor Escrow Agent) may at
any time resign as such by delivering the Escrow Fund to any
successor Escrow Agent jointly designated by the other parties
hereto in writing, or to any court of competent jurisdiction,
whereupon Escrow Agent shall be discharged of and from any and
all further obligations arising in connection with this
Agreement. The resignation of Escrow Agent will take effect
on the earlier of (a) the appointment of a successor
(including a court of competent jurisdiction) or (b) the day
which is 30 days after the date of delivery of its written
notice of resignation to the other parties hereto. If at that
time Escrow Agent has not received a designation of a
successor Escrow Agent, Escrow Agent's sole responsibility
after that time shall be to retain and safeguard the Escrow
Fund until receipt of a designation of successor Escrow Agent
or a joint written disposition instruction by the other
parties hereto or a final non-appealable order of a court of
competent jurisdiction.
(i) In the event of any disagreement between the other
parties hereto resulting in adverse claims or demands being
made in connection with the Escrow Fund or in the event that
Escrow Agent is in doubt as to what action it should take
hereunder, Escrow Agent shall be entitled to retain the Escrow
Fund until Escrow Agent shall have received (i) a final non-
appealable order of a court of competent jurisdiction
directing delivery of the Escrow Fund or (ii) a written
agreement executed by the other parties hereto directing
delivery of the Escrow Fund, in which event Escrow Agent shall
disburse the Escrow Fund in accordance with such order or
agreement. Any court order shall be accompanied by a legal
opinion by counsel for the presenting party satisfactory to
Escrow Agent to the effect that the order is final and non-
appealable. Escrow Agent shall act on such court order and
legal opinion without further question.
(j) Purchaser and Shareholders shall pay Escrow Agent
compensation (as payment in full) for the services to be
rendered by Escrow Agent hereunder in the amount of $
at the time of execution of this Agreement and $
annually thereafter and agree to reimburse Escrow Agent for
all reasonable expenses, disbursements and advances incurred
or made by Escrow Agent in performance of its duties hereunder
(including reasonable fees, expenses and disbursements of its
counsel). Any such compensation and reimbursement to which
Escrow Agent is entitled shall be borne 50% by Purchaser, and
50% by Shareholders in equal shares. Any fees or expenses of
Escrow Agent or its counsel that are not paid as provided for
herein may be taken from any property held by Escrow Agent
hereunder.
(k) No printed or other matter in any language
(including, without limitation, prospectuses, notices, reports
and promotional material) that mentions Escrow Agent's name or
the rights, powers, or duties of Escrow Agent shall be issued
by the other parties hereto or on such parties' behalf unless
Escrow Agent shall first have given its specific written
consent thereto.
(l) The other parties hereto authorize Escrow Agent, for
any securities held hereunder, to use the services of any
United States central securities depository it reasonably
deems appropriate, including, without limitation, the
Depositary Trust Company and the Federal Reserve Book Entry
System.
6. LIMITED RESPONSIBILITY
This Agreement expressly sets forth all the duties of
Escrow Agent with respect to any and all matters pertinent
hereto. No implied duties or obligations shall be read into
this agreement against Escrow Agent. Escrow Agent shall not
be bound by the provisions of any agreement among the other
parties hereto except this Agreement.
7. OWNERSHIP FOR TAX PURPOSES
Shareholders agree that, for purposes of federal and
other taxes based on income, Each Shareholder will be treated
as the owner of an equal percentage of the Escrow Fund,
respectively, and each Shareholder will report all income, if
any, that is eamed on, or derived from, the Escrow Fund as
their income, in such proportions, in the taxable year or
years in which such income is properly includible and pay any
taxes attributable thereto.
8. NOTICES
All notices, consents, waivers and other communications
under this Agreement must be in writing and will be deemed to
have been duly given when (a) delivered by hand (with written
confirmation of receipt), (b) sent by telecopier (with written
confirmation of receipt) provided that a copy is mailed by
registered mail, return receipt requested, or (c) when
received by the addressee, if sent by a nationally recognized
overnight delivery service (receipt requested), in each case
to the appropriate addresses and telecopier numbers set forth
below (or to such other addresses and telecopier numbers as a
party may designate by notice to the other parties):
Shareholders:
Attention:
Facsimile:
with a copy to:
Facsimile:
Purchaser: United Stationers Supply Co.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: President
Facsimile:
with a copy to: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, General Counsel
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Escrow Agent:
Attention:
Facsimile:
with a copy to:
Attention:
Facsimile:
9. JURISDICTION; SERVICE OF PROCESS
Any action or proceeding seeking to enforce any provision
of, or based on any right arising out of, this Agreement may
be brought against any of the parties in the courts of the
State of Illinois, County of ▇▇▇▇, or, if it has or can
acquire jurisdiction, in the United States District Court for
the Northern District of Illinois, and each of the parties
consents to the jurisdiction of such courts (and of the
appropriate appellate courts) in any such act1on or
proceeding and waives any objection to venue laid therein.
Process in any action or proceeding referred to in the
preceding sentence may be served on any party anywhere in the
world.
10. COUNTERPARTS
This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original
and all of which, when taken together, will be deemed to
constitute one and the same.
11. SECTION HEADINGS
The headings of sections in this Agreement are provided
for convenience only and will not affect its construction or
interpretation.
12. WAIVER
The rights and remedies of the parties to this Agreement
are cumulative and not alternative. Neither the failure nor
any delay by any party in exercising any right, power, or
privilege under this Agreement or the documents referred to in
this Agreement will operate as a waiver of such right, power,
or privilege, and no single or partial exercise of any such
right, power, or privilege will preclude any other or further
exercise of such right, power, or privilege or the exercise of
any other right, power, or privilege. To the maximum extent
permitted by applicable law, (a) no claim or right arising out
of this Agreement or the documents referred to in this
Agreement can be discharged by one party, in whole or in part,
by a waiver or renunciation of the claim or right unless in
writing signed by the other party; (b) no waiver that may be
given by a party will be applicable except in the specific
instance for which it is given; and (c) no notice to or demand
on one party will be deemed to be a waiver of any obligation
of such party or of the right of the party giving such notice
or demand to take further action without notice or demand as
provided in this Agreement or the documents referred to in
this Agreement.
13. EXCLUSIVE AGREEMENT AND MODIFICATION
This Agreement supersedes all prior agreements among the
parties with respect to its subject matter and constitutes
(along with the documents referred to in this Agreement) a
complete and exclusive statement of the terms of the agreement
between the parties with respect to its subject matter. This
Agreement may not be amended except by a written agreement
executed by the Purchaser, the Shareholders, and the Escrow
Agent.
14. GOVERNING LAW
This Agreement shall be governed by the laws of the State
of Illinois without regard to conflicts of law principles.
IN WITNESS WHEREOF, the parties have executed and
delivered this Agreement as of the date first written above.
Purchaser: Shareholders:
United Stationers Supply Co.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
By: __________________________ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name:
Title:
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Escrow Agent: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
By:___________________________ /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title:
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
EXHIBIT 7.4(a)
Opinion of Counsel to Shareholders
[DATE]
United Stationers Supply Co.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Gentlemen:
We have acted as counsel to ▇▇▇▇▇▇▇ Bros., Inc., a
Louisiana corporation (the "Company"), and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
being all of the shareholders of the Company (the
"Shareholders") in connection with the Stock Purchase
Agreement dated October 1,1996 (the "Agreement") between the
Shareholders and United Stationers Supply Co., an Illinois
corporation ("Purchaser"). This is the opinion contemplated
by Section 7.4(a) of the Agreement. All capitalized terms used
in this opinion without definition have the respective
meanings given to them in the Agreement or the Accord referred
to below.
This Opinion Letter is governed by, and shall be
interpreted in accordance with, the Legal Opinion Accord (the
"Accord") of the ABA Section of Business Law (1991). As a
consequence, it is subject to a number of qualifications,
exceptions, definitions, limitations on coverage and other
limitations, all as more particularly described in the Accord,
and this Opinion Letter should be read in conjunction
therewith. The law covered by the opinions expressed herein
is limited to the Federal Law of the United States and the Law
of the State(s) of Louisiana.
Based on the foregoing, our opinion is as follows:
1. The Agreement, the Escrow Agreement and the
Shareholders' Releases are enforceable against the
Shareholders.
2. The authorized capital stock of the Company consists
of 10,000 shares of common stock, no par value, of which
2,088 shares are outstanding. Shareholders own all of the
outstanding stock of record and beneficially, free and clear
of all adverse claims. As a result of the delivery of
certificates to Purchaser and the payment to Shareholders
being made at the Closing, Purchaser is acquiring ownership of
all of the outstanding shares, free and clear of all adverse
claims.
3. The Company is a corporation duly organized, validly
existing and in good standing under the laws of its
jurisdiction of incorporation as set forth in Part 3.1(a) of
the Disclosure Letter, with full corporate power and authority
to own its properties and to engage in its business as
presently conducted or contemplated, and is duly qualified and
in good standing as a foreign corporation under the laws of
each other jurisdiction in which it is authorized to do
business as set forth in Part 3.1(a) of the Disclosure Letter.
All of the outstanding shares of capital stock of the Company
have been duly authorized and validly issued and are fully
paid and nonassessable and were not issued in violation of the
preemptive rights of any Person.
4. Neither the execution and delivery of the Agreement
nor the consummation of any or all of the Contemplated
Transactions (a) breaches or constitutes a default (or an
event that, with notice or lapse of time or both, would
constitute a default) under any agreement or commitment
[describe selection criteria] to which any shareholder is
party or (b) violates any statute, law, regulation or rule, or
any judgment, decree or order of any court or other
Governmental Body applicable to any Shareholder.
5. Neither the execution and delivery of the Agreement
nor the consummation of any or all of the Contemplated
Transactions (a) violates any provision of the certificate of
incorporation or bylaws (or other governing instrument) of the
Company, (b) breaches or constitutes a default (or an event
that, with notice or lapse of time or both, would constitute a
default) under, or results in the termination of, or
accelerates the performance required by, or excuses
performance by any Person of any of its obligations under, or
causes the acceleration of the maturity of any debt or
obligation pursuant to, or results in the creation or
imposition of any Encumbrance upon any property or assets of
the Company under, any agreement or commitment [describe
selection criteria] to which the Company is a party or by
which any of their respective properties or assets are bound,
or to which any of the properties or assets of the Company are
subject, or (c) violates any statute, law, regulation, or
rule, or any judgment, decree or order of any court or other
Governmental Body applicable to the Company.
6. Except for requirements of the HSR Act, no consent,
approval or authorization of, or declaration, filing or
registration with, any Governmental Body is required in
connection with the execution, delivery and performance of the
Agreement or the consummation of the Contemplated
Transactions.
We hereby confirm to you that, except as set forth in
Part 3.15 of the Disclosure Letter, there is no Proceeding by
or before any court or Governmental Body pending or overtly
threatened against or involving the Company or that questions
or challenges the validity of the Agreement or any action
taken or to be taken by the Company pursuant to the Agreement
or in connection with the Contemplated Transactions, and the
Company is not subject to any judgment, order or decree having
prospective effect.
The Accord is changed for purposes of this Opinion Letter
pursuant to 21 of the Accord as follows:
(a) The Primary Lawyer Group shall include all lawyers
presently at our firm who have given substantive
attention to the affairs of any of the Shareholders
or the Company since
(b) Accord l9(e) and 19(j) are deleted.
We understand that you are delivering a copy of this
opinion to [identify lenders to Purchaser] in connection with
the financing of the transactions contemplated by the
Agreement and agree that [those lenders] may rely on this
opinion as if it were addressed to them.
Very truly yours,
EXHIBIT 8.4
Opinion of Counsel to Purchaser
[DATE]
[Names and Addresses of Shareholders]
Ladies and Gentlemen:
I am General Counsel of, have acted as counsel to United
Stationers Supply Co., an Illinois corporation ("Purchaser"),
in connection with the Stock Purchase Agreement dated October
1, 1996 (the "Agreement") between ▇▇▇▇▇▇▇ Bros., Inc., a
Louisiana corporation (the "Company"), and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
being all of the shareholders of the Company (the
"Shareholders"), and Purchaser. This is the opinion
contemplated by Section 8.4(a) of the Agreement. All
capitalized terms used in this opinion without definition have
the respective meanings given to them in the Agreement or the
Accord referred to below.
This Opinion Letter is governed by, and shall be
interpreted in accordance with, the Legal Opinion Accord (the
"Accord") of the ABA Section of Business Law (1991). As a
consequence, it is subject to a number of qualifications,
exceptions, definitions, limitations on coverage and other
limitations, all as more particularly described in the Accord,
and this Opinion Letter should be read in conjunction
therewith. The law covered by the opinions expressed herein
is limited to the Federal Law of the United States and the Law
of the State of Illinois.
Based on the foregoing, my opinion is as follows:
1. The Agreement and the Escrow Agreement are
enforceable against Purchaser.
2. Neither the execution and delivery of the Agreement
and the Escrow Agreement nor the performance of Purchaser's
obligations thereunder (a) violates any provision of the
certificate of incorporation or bylaws (or other governing
instrument) of Purchaser, (b) breaches or constitutes a
default (or an event that, with notice or lapse of time or
both, would constitute a default) under any agreement or
commitment [describe selection criteria] to which Purchaser is
party or (c) violates any statute, law, regulation or rule, or
any judgment, decree or order of any court or Governmental
Body applicable to Purchaser.
Very truly yours,
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
General Counsel